A Case of the Shatz - Fisking Mike Shatzkin

In the comments, Hugh gracefully said he agreed with 86% of what Mike said.

I, however, found little to agree with. I'm also not much in the grace department.

I'll take Mike point-by-point, which begins after a few paragraphs of introduction.

Mike: Hugh’s latest business inspiration — a call to arms suggesting to independent authors that they should just eschew traditional publishing or demand it pay them like indie publishing — is potentially much more toxic to consume. (The agenda here is unclear. Is Hugh most interested in getting more authors self-publishing or in organizing authors to demand better terms from publishers? It’s hard to tell, but there is an agenda, it would seem.)

Joe: Hugh's agenda is transparent, both on his blog, and on www.authorearnings.com, and in the email exchanges and conversations I've had with him.

He wants authors to be informed so they can make correct decisions.That's also my agenda.

Your agenda, Mike, is also transparent. As is the agenda of the Big 5, most literary agents, and the Authors Guild. You all earn your living from the legacy industry, and if there is a mass exodus of authors to self-publishing, you all are in deep doo-doo.

I'll reiterate: Hugh is losing time and money on www.authorearnings.com. He won't get his time or money back. I could have written a dozen novels instead of blogging these past years. Neither of us charge authors any consulting fees. We do what we do as a public service.

Mike: The long story short is that Howey analyzed a bunch of Amazon rank data (apparently a single day’s worth, 1/28-29/2014, which has so many obvious problems associated with it that all by itself it raises questions about what of value can be gleaned) and from that extrapolated some breathtaking (and breathless) conclusions that go way beyond what the data could possibly tell anybody.

The analysis purports to compare how authors do self-publishing versus how they’d do with a publisher and comes to the conclusions that they make more per copy on average self-publishing and maybe even sell more and make better books to boot. (For much more and better analysis of the data biases, I’d check Dana Beth Weinberg’s post on this subject. Her objections and my objections have very little overlap.)

Joe: I've been doing similar data studies for years, though not nearly on the scale and scope of Hugh's study. And I never took it to the extreme level Hugh did, crawling Amazon, finding data on 7000 titles (soon to be many, many more.)

And Hugh's conclusions do not go way beyond what the data could possibly tell anybody. Comparable anecdotal data has been telling me the same exact thing for years. It's also been telling thousands of other authors the same thing. There just hasn't been a way for all of us to prove to the world what our monthly bank statements have been showing us: self-publishing is a lot bigger and more lucrative than anyone assumed it was.

Mike: My problem with the whole exercise is that there is a long list of relevant facts not included in the data and therefore ignored in the subsequent analysis:

1. Author revenue from print sales. Authors not only make a lot of money on print sales, but print in stores (as opposed to printed copies available through Amazon) is also a marketing element. This all still matters. In a comment on Howey’s site, one author estimates her Amazon sales as anywhere from 10% to 30% of her total sales. Obviously, for some other authors it is a lot more than that, maybe north of 70% of their sales. Which kind of author are you? And if you’re the kind selling mostly on Amazon, is that an inherent characteristic of your appeal or a deficiency in your non-Amazon distribution?

His conclusion: "It turns out that traditionally published authors give up more pie for their crust than indie authors give up for their crumbs."

In other words, those extra paper sales that the legacy industry can offer authors aren't worth taking the lower ebook royalties.

And that’s for the Top 100 print bestsellers. I’d guess midlist author paper sales on bookstore shelves are much smaller, percentage wise, than their ebook sales (legacy or self-pub).

In other words, a Top 100 Bookscan bestseller in paper is someone making scads of money with paper, whereas the overwhelming majority of legacy authors don't hit the Bookscan Top 100. But even those huge bestselling authors would do better forsaking print and self-publishing their ebooks.

If that's the case, the midlist authors are getting royally screwed, because they're giving up 75% in net ebook royalties to publishers in exchange for very little paper sales.

I'm guessing this point will be proven as Hugh digs deeper into Bookscan figures.

Mike: 2. Getting an advance before publication versus having costs before publication. Although Howey cites one author who turned down an advance to self-publish, those stories appear to be few and far between. I was really struck by one such author announcing nearly two years ago that he was doing this, but, in the end, that author took a publishing deal — not a self-publishing deal — from Amazon. And the size of the advance is also a consideration that Howey’s analysis doesn’t touch on. It can’t, because that data — however relevant — isn’t available. (But then, can you draw valid conclusions without it?)

Joe: I've personally spoken with five authors who have turned down deals. And I doubt they're the only five. Not every author has the desire to make their business dealings known. And not every author goes looking for legacy deals.

Mike: 3. Unearned advances and their impact on author earnings. Unearned advances are a substantial part of author compensation. I know of one Big Five house that calculates that they pay more than 40% of their revenue to authors and another which says that number is in the high 30s. That’s not all digital, some of that is print with manufacturing and warehousing and shipping costs associated with the revenue. How can you compare how authors are compensated if you don’t calculate the benefits to authors, meaning the resulting higher percentage of the revenue they’ve taken, of unearned advances? That relevant data is also not available.

Joe: Mike, could it be the advances are unearned because legacy royalties suck?

If you were a genre author offered a $100k advance earning 12.5% royalties off of the digital list price (25% of net, and publishers sell to Amazon at roughly 50% off their digital list price), and your ebook is priced at $4.99, you earn $0.63 per ebook sold. You need to sell 159,000 ebooks to earn out your advance. And when you do, you're stuck with 63 cents per sale, FOREVER.

The same ebook, self-published, earns the author $3.49 per copy sold. If they sell 28,653 copies, they made the $100,000. Every copy they sell after that, they make 5.6x more money than they do on a legacy ebook.

Which seems like a better deal for authors?

Also, unless the author is a mega bestseller commanding astronomical advances, guess what happens if the author doesn't earn out? They don't get any new deals from their publisher, even though the publisher STILL holds onto their backlist rights.

Publishers can afford advances because they make triple what authors do in royalties. It's a high interest loan (ridiculously high interest), and even if it isn't paid pack by earning out, the publisher can still do very well.

Mike: 4. Getting paid for doing the work of publishing which goes beyond authoring. Frankly, the biggest omission to me is the eliding of the costs — in time and money — of doing the work the house does for an author. Howey mentions that editors and cover designers can be hired. That’s true, and good and competent ones too. But is a good writer necessarily a wise chooser of an editor or of a cover design?

Joe: Check www.authorearnings.com for your answer to how good indie authors are at choosing covers and editors. Or just look at the Amazon Top 100 lists yourself and count the indie authors there.

And these are SUNK costs. A house that does work for an author continues to charge that author forever.

Sorry, but it took me longer to write the book than it took my legacy publisher to edit it and create cover art. Yet they make 37.5% royalties off list, and I only get 12.5%?

Mike: How much does it cost if you don’t get the right one the first time? (We know publishers aren’t perfect at these jobs either, but they’re bound to be better most of the time than somebody who hasn’t ever done it before.)

Joe: I've changed my covers multiple times. Yes, it is an extra cost. It's also a cost I would have gladly paid some of my legacy publishers if they'd changed the bad covers they did for me. But, alas, they knew better, and change simply doesn't happen in the legacy world. Imagine if they did. I'd love to hear that phone call:

"Mr. Konrath, this is Legacy John over at Big 5 publishing. Remember that cover we did for you? The one you hated? The one we didn't show to any sort of focus group? Well, we've finally decided to listen to you, and we're changing your cover and relaunching your book!"

Right.

Except, I've done that many times on my own. And so have many self-publishers.

Mike: And is that how you want to spend your time? Authoring is a job but doing the work of self-publishing is also a job. And it entails real risk. Advising a writer to self-publish without considering these things is like telling somebody who’s a good cook that they might as well just open a restaurant.

Joe: Actually, it's more like telling someone who plays a guitar that they should go to open mic night and see what the audience thinks. Publishing a book doesn't require a bank loan like opening a restaurant does. All it requires is a little bit of time and money. If it were rocket science, 50% of the top selling books on Amazon wouldn't be indie books.

Mike: 5. Current indie successes where the author name or even the book itself was “made” by traditional publishers. Another factor any author self-publishing has to consider is the likelihood of success, which is much greater if the books are backlist (have some fame in the marketplace) or even if just the author has been previously published. Successes like Howey’s, from a total standing start with no prior writing track record, are quite different from others who have reclaimed their backlists and used them as a platform to build a self-publishing career.

Joe: Mike, reread what you just said.

"others who have reclaimed their backlists and used them as a platform to build a self-publishing career. "

First of all, these backlist books obviously weren't selling for the legacy publisher, or else the legacy publisher never would have returned the rights.

Second of all, if the authors who got their backlists returned were able to build a career, WHY THE HELL WOULD ANYONE SUBMIT TO LEGACY PUBLISHERS EVER AGAIN?!?

Pardon my yelling, but what you just said shows your absolute inability to understand what's happening here.

To rephrase what you just said:

Legacy publishers couldn't sell the same books that went on to make self-published authors successful.

Mike: Now, that data could be obtained. Wouldn’t you like to know how many of the “indie authors” at various income levels were cashing in on what was originally publisher-sponsored IP and how many started from scratch? (It’s more challenging, of course, to assemble the data by the author rather than by the book.) But I sure think it would be necessary to understand before drawing conclusions about who should self-publish.

Joe: Are you arguing the old "you were published before and that's why you're successful now" meme? If so, I dispelled this in 2012. It's demonstrably false. I've consistently outsold my old publishers on my own, and if I had debuted in 2009 and not 2002, I would have self-pubbed those books and skipped the legacy industry entirely.

Or are you saying that having multiple ebooks improves your chances at self-pubbing success? Does something this obvious even need to be said? You know having multiple books in print also improves your chances at legacy publishing success, right? The more shelf space you have, the better.

But with virtual shelf space, it's an even playing field. Brown has one page for The DaVinci Code on Amazon, and I have one page for Whiskey Sour on Amazon. In the old days, he had 300 copies on the front table, 40% discount, and I had two copies, spine-out in section and full price.

Mike: 6. Rights deals. Howey himself has benefited from having a stellar agent who has made foreign and movie rights deals for him across the globe. (She even made a print-only deal for Wool with S&S.) Yes, you can (if you’re lucky) do this like Howey did: finding an agent to represent his self-published material. But that’s another thing to find and manage that comes with the deal (and the advance check you get to cash) if you do a deal with a traditional publisher (although, admittedly, you would probably have had to find the agent in the first place, and self-publishing could be a way to do that.) Nonetheless, you get more rights-selling firepower on your side if you’re with a publisher.

Joe: Wha?

I've sold world rights to publishers that didn't do anything with them. They didn't return those rights to me, either.

Then, when I got my rights back, my agent sold my self-pub books to more than twenty countries.

You certainly get more subsidiary rights-selling firepower with a good agent. But with a publisher? Maybe, if you're a huge bestseller. But I wager I know more authors whose publishers didn't sell foreign rights than those who did. That used to be common bar conversation at conferences.

"You sold to Korea? I wish my publisher did that..."

Mike: 7. How well Amazon data “maps” to what happens elsewhere. Is it really projectable? A massive flaw in the analysis is the biased nature of the data. Amazon’s sales profile is not the same as the market as a whole. (One day of data isn’t a projectable sample either.) One agent pointed out to me that they are weak at selling mass-market fiction, for example, and that their ebook sales tend to the fresh and new, so they don’t get a bump when a mass-market paperback comes out. But we can be pretty sure that Amazon sells ebooks more successfully than the market as a whole, because Kindle has the biggest installed base and Amazon has the most book customers.

Joe: More data is coming, Mike. Hugh is just getting started.

As an author who makes 90% of his income on Amazon (and I'm far from the only one, both self-pubbed and legacy), I'm not very concerned if the Amazon data Hugh came up maps to what happens elsewhere. I don't care if Amazon is weak selling mass-market fiction, because I don't sell mass-market fiction. I don't need to. I only need to sell ebooks.

And Hugh's data shows how much more an author earns self-pubbing on Amazon than a legacy author earns on Amazon.

And today, Hugh's data includes Bookscan, which shows that even if authors give up a paper deal with a legacy publisher, they still earn more via self-pubbing.

Authors are reading this, and soaking it in. So many were anxious to get this data it crashed Hugh's website when he launched.

As this data spreads, do you really think publishers are going to continue to be able to acquire the best books? What can they offer?

Mike: This bias of sample is compounded by the focus on genre fiction. No matter how big a percentage of those niches is served by Amazon, it is important to remember that it is where they are relatively strongest in relation to the big publishers. If we were comparing literary fiction or biographies — both of which have lots of worthy authors too — the chances are the cost of an Amazon-only distribution strategy, or an ebook-only distribution strategy, would be far higher. And the chances of success would be far lower.

Joe: Then publishers should have nothing to worry about. They'll still get lit fic and biography submissions. Problem solved.

That is, until ebook sales climb in those categories as well.

Hmm, how much lit fic and biographies to publishers actually sell? How big are those pie slices?

I wonder, when the data come in, if those authors also do better self-pubbing. I guess we'll have to wait and see what Hugh digs up.

Mike: 8. The apparent reality: flow of authors is self- to traditionally-published, not the other way around. But I think part of the motivation for this piece was frustration in the indie author community at the fact that many of the best ones get signed up by traditional houses, who view indie publishing as a farm system, and very few established authors will actually turn down an advance to go indie. They’ll reclaim their backlist and self-publish it, or do a short ebook on a subject that is timely and can’t wait for print or be made longer. But there has been very little evidence that I am aware of that publishers are having wholesale difficulties getting authors to come aboard with them on a traditional deal.

Joe: I notice newbie self-pubbed authors signing legacy deals. I also notice them declining legacy deals. But how many former legacy authors go back? And how happy are those newbie authors who sign legacy deals? Where are their ringing endorsements?

Where's that self-pubbed book that became a huge legacy bestseller? Has there been one yet? (50 Shades was small press originally, BTW.)

How about all the authors who never turn down legacy deals because they never even bother to submit to legacy publishers?

And how about all those authors you mentioned earlier (and apparently forgot about) who built their self-pub career using previously legacy-pubbed books? Aren't they the apparent reality? I can name dozens of those. That seems to be the real flow--legacy pubbed authors who get their rights back and start making money for the first time.

Is the Big 5's long term plan to make money off of self-pubbed authors as long as authors remain naive? Is that sustainable? Especially now that Hugh's data is being read by everyone with Internet access?

Everyone should self-publish, by your own admission. Why should anyone send out query letters to agents and publishers and waste months of time? Why not self-publish and get discovered that way, while earning money? That's the "flow" you're referring to, right?

Mike: 9. Publishers can raise royalty rates (or lower prices) when it becomes compelling to do so. Which brings us to the final point that I think is relevant and ignored. As Howey and others have pointed out, the early days of ebook publishing appear to have been good for publisher margins. They can afford to give authors more. (In fact, I encouraged them to do that before their accounts come after them for the extra margin in a post nearly three years old.) But they’re not going to give it out of some spirit of generosity or because Hugh Howey (or Mike Shatzkin) thinks it would be a good idea. They’ll give it when it is a competitive necessity to do so.

But legacy publishers couldn't afford me, or Hugh, or thousands of other authors. Ebooks are where the money is, and even if a publisher offered me 95% ebook royalties, that still only amounts to 47.5% of list.

I can make 70% of list on my own.

I'll repeat that.

Even if a publisher offered me 95% ebook royalties, that still only amounts to 47.5% of list.

I can make 70% of list on my own.

The other things that publishers offer (editing, covers) are one-time costs. And print? There's a whole generation of authors who don't care if they're ever in a Barnes & Noble. We can sell our Createspace and Lightning Source paper books on Amazon.

Mike: So my advice about Hugh Howey’s advice is simple. Totally ignore it if you’re not a genre fiction author; there’s precious little evidence or thinking in it that applies to you.

Joe: Yet. Hugh hasn't presented the data yet. And even if lit fic or biography or non-fic or children's books still earn more in paper, they won't once B&N is gone. I know children who are learning to read on Kindles and iPads. They won't have the nostalgia for paper any more that I have nostalgia for 8 track tapes. It's not as if action, horror, and romantic comedy movies went to DVD and BluRay while documentaries and musicals still sell in VHS.

Paper won't ever go away. But it will be a niche market, and not the most lucrative way for writers to make money.

Mike: And if you are a genre author, be very clear about the extra work and extra risk you take on in order to get some extra margin. Both will be required for sure whether the extra margin materializes or not.

Joe: The "extra margin" is 5.6x the royalties your publisher is offering you. So a better way of thinking about it is, "Sign with a publisher and they'll give you 12.5% of list price and do your editing and cover, or self-publish and make 70% of list price and do your own editing and cover."

Mike, you have a consulting business. What if you had to do a bit more work than you currently do, but you'd make 5.6x as much money?

That's the current dilemma authors have. And I don't see it as a dilemma. I see it as a no-brainer.

That said, every author has different goals, and legacy publishing does offer some advantages, and every writer needs to find out as much as they can before they make any decision.

Mike: Self-publishing is definitely an incredible boon to commercial writers and they should all understand how it works. Increasingly, literary agencies see it as their job to provide that knowledge. It is almost certainly a good idea to self-publish for many writers who have reclaimed a backlist that has consumer equity.

Mike: It is a perfectly sensible way to launch a career, either before going after the commercial establishment or as a part of the strategy to engage with them. (Editors in the big houses are well aware of the self-publishing successes; it’s a new farm system.)

Joe: It's a farm system for naive authors. BTW, Steve Zacharius used this same analogy. But even though I've sold over 1 million self-pubbed ebooks, he still hasn't called me with a print-only deal.

Why aren't I being farmed? Could it have been something I said?

Mike: If an author has access to markets, it can be a better way to get short or very timely material to them faster. But to say it has its advantages and applications is a far cry from saying that it is a preferable path for a large number of authors who could get publishing deals.

Joe: Calling all authors with publishing deals who later went and self-pubbed: which is the preferable path?

Which is better, 12.5% royalties or 70% royalties?

Which is better, having control over cover art or not having any say?

Which is better, choosing the edits you want to make or having your editor force them on you?

Which is better, being paid monthly or twice a year (with reserves against returns held)?

Which is better, owning your rights or selling them for the term of copyright (your life plus 70 years)?

Which is better, releasing as much of your writing as you want to or non-compete clauses preventing that?

Which is better, publishing when you finish the book or waiting 18 months for a legacy publisher to release it?

Which is better, being on the shelves of B&N (while they're still around) and contending with a high return rate, or selling your paper books via Amazon and Createspace (and making higher royalties)?

Which is better, working hard and keeping control or working hard and having no control?

Which is better, listening to industry experts who make money by telling you to sign with publishers, or listening to industry experts who do it for altruistic reasons?

Mike: I can’t “prove” this so I won’t try, but it bears further emphasis that it still looks like the number of authors who start as self-published and then get “discovered” by the establishment and switch over is still larger than the number of authors who say “keep your stinking advance” and turn down a deal to do the publishing themselves. None of the parties involved is stupid — not the traditionally-published authors, nor the self-published authors, nor the hybrids — not even the publishers. And they might not be evil, either. As for self-interested debaters, they exist on all sides.

Joe: Unless publishers drastically change how they do business, I don't see how authors will keep signing with them. Some still may. Every author has different goals, different paths to follow.

But whatever authors decide to do, it is important that they make informed decisions. That they understand the pros and cons. That they study the industry and weigh all options and go into this believing they're doing the right thing, not because they have no choice.

I am one of tens of thousands who had no choice. I wanted to write books that reached readers, and the legacy system was the only way to do it.

The fact that a choice now exists is amazing. Thousands of authors are making money for the first time every. Some are paying bills. Some are making a living. Some are getting rich. Some are finding success and signing with legacy publishers. Some are finding success after getting dropped by their legacy publishers.

But one thing is 100% certain. The balance of power has shifted. Writers are now in control.

How we use that control depends on how informed we are, and what we each want.

Mike: PS: I HATE long comments. If you disagree with me and want to use my space to make your case, please be concise. (And frankly, although I also prefer you to be concise if you agree with me, I’m made less cranky when I get long-winded support.)

Joe: No worries, Mike. I'd just assume keep the debate over here, where more people will see it.

And people here are free to leave long comments, as many as they like.

I was recently Skyping my friend and frequent collaborator, Ann Voss Peterson, and she wrote back:

"There's a total inability to see anything from the authors' points of view. That is pervasive among these legacy defenders. None of them consider what is financially good for the author AT ALL."

That's because we're cattle. We're the farm team. We're the limitless resource, useless without a firm hand to connect us with readers.

At least, that's how it used to be. That firm hand has always charged a premium for the services it provided. They could get away with charging a lot, because there was no other choice.

But now those services are optional, not necessary.

And Hugh Howey, and his nameless Data Guy (who will soon be writing a post for this blog) are showing all indie writers how unnecessary legacy publishers are.

Yes, Mike, this is potentially toxic. Especially since Hugh and Data Guy aren't planning on stopping. They're going to release more and more data until even you won't be able to dismiss it.

But you did your best to warn the legacy industry. For years you've been warning them, Mike. And you're to be commended for that.

Which is why I'm saddened you've stopped warning and advising them, and started this apologetics approach, defending an indefensible industry, coddling them rather than hitting them with the frightening reality; a reality they should be very worried about.

You could have used Hugh's data as a call to arms. As an industry-wide wake-up.

Instead, you've used some really poor arguments to try to discount Hugh's work.

It doesn't matter, though. More data is coming. It doesn't matter if you discount it, or ignore it, or tell the legacy industry not to worry about it. Because writers are listening to it.

And without writers, the legacy industry is finished.

Addendum

Mike continued to say silly things in his comments, and I wanted to respond to some of them.

Mike: Doing an (incomplete) analysis of how (some of) the top 0.5% of titles do tells me (and everybody else) *nothing *about how many tried and failed and how much it cost them to try and fail.

Joe: So how many authors have tried to be published by the Big 5, or attain an agent, and have failed?

I have no doubt many authors aren't doing well self-publishing. But would those books have ever been published by the legacy industry?

Compare that to books rejected by the legacy industry (like mine) or that have gone out of print (like many others) and have gone on to make a great deal of money. ORIGIN was rejected in 1999 by over 20 publishers. It just hit the Top 100 Bestsellers on Amazon last week, and made me about $3k in two days.

And compare it to the books that were accepted by publishers, and failed. Which are the majority, last I checked. Two out of five make money, two break even, two lose money, last I spoke to my old editor. (Konrath fail update: 2x3=6 not 5. It's 1 makes money, 2 break even, 2 lose money.)

A self-publishing author who failed at least did so having a fighting chance. The same cannot be said by those rejected, orphaned, and ruined by the industry you're defending.

As for self-pubbed authors failing--haven't you heard that ebooks are forever? There is no shelf life. Today's failure may be a hit next year, or next decade. Ebooks can't be stripped, remaindered, or returned.

Mike: it is possible that a genre author might be able to glean some value from your analysis. But it is worthless for any other kind and we are a LONG way from the time when MOST authors -- even genre authors -- will be better off self-publishing than being published.

Joe: Show me an author who has done both--self published and legacy published--who agrees with you. Any author at all. You can read my thousands of blog comments for hundreds who disagree.

Mike: If bestsellers were arrayed by CUSTOMER SPEND, we'd see a very different picture.

Joe: To quote Jake Blues: Jesus H. god-dancing christ! Mike! MIKE! AUTHOR'S DON'T CARE ABOUT CUSTOMER SPEND! THEY CARE ABOUT HOW MUCH MONEY THEY CAN EARN!

Hint: This is why Hugh's site is called "Author Earnings". Because his data reflects... wait for it... Author Earnings.

You simply don't get it. Forest for trees? Blinders on? What can't you understand here?

Mike: If you've already got a publisher, you'll still benefit from doing the digital marketing with your readers and fans. That's another thing missing from the analysis. Whatever an author can do on behalf of a self-published book, they can do on behalf of one that has a publisher too!

Joe: They sure can!

And next time you get paid to speak, Mike, you can give me 3/4 of the money you made! You don't mind doing all the work and letting someone else make the lion's share of the profits, right?

(Am I wrong, or did Mike just cross over into self-parody here?)

Mike: I know that all the big publishers are developing digital marketing capabilities and lists of names and ways to interact at scale.

Joe: Yes, the big publishers have a history of respecting readers: High ebook prices, collusion, price fixing, windowing, $30 hardcovers, year waits for paperbacks... it's almost as if they treat readers as well as they treat their authors.

But if, after a hundred years of treating bookstores as their customers, they've finally figured out that readers are their customers, good for them. Looking forward to seeing them innovate... well... anything.

Mike: I'm 66 years old and I have been in the publishing business since I was 11. Based on all those years of observation, I refuse to believe that the size of the advance isn't the most important thing to 9 out of 10 of the authors who do it for a living, if not 99 out of 100.

Joe: And you damn kids get off my lawn!

I really can't argue with someone who refuses to believe something. But I urge you to not confuse "advance" with "earnings". I got a $33k advance for my first book. I've made that self-publishing in a good week. An advance is not the most important thing for me, or for many other authors I can name. Perhaps it was like that, back in your day, but the times they are a' changing.

As I mentioned, an advance is a high interest loan, which is very difficult to pay back.

Do you have a pension plan, Mike? A 401k? Let's say it's worth $50k a year in dividends, and will continue until you're 100 years old. How about I give you $200k for it, right now? Does that seem fair to you? It's a large sum of money upfront. Why worry about what you'll make ten years from now?

If I made that offer to 99 out of a 100 people, think they'd take it?

Also, I've called the US Department of Labor to arrest your parents for putting you to work at age 11. Sorry I had to do that, but children need to be protected.

Mike: In the agented world, the average advance is considerably higher than Jackie's. Her publishers are setting a very low bar for her to do better on her own. No agent can afford to negotiate contracts for 15% of $2500 per book and none of them do.

Joe: None of them, huh? So no agents ever represented authors who sold to Harlequin? Or Silhouette? Or Leisure? Or Pinnacle? Or Five Star? Or Medallion? Or Kensington? And no doubt many others? None of them do? Really?

You seem to know a lot about the average advance. If it isn't the $5000 mentioned in your comment thread, what is it? You neglected to mention it, though you're obviously sure of yourself.

Mike: I mean is that there are people doing it for a living and there are people who are doing it for other reasons, ranging from pin money to personal satisfaction to whatever.

Joe: Such a modest lot, we writers are. All we need is pin money and a pat on the head, or just the knowledge of a job well done. We're more like hobbyists, really.We don't write to be read, and very few of us aspire to make a career out of this. Especially the ones who read our blogs, and who are wiping the floor with you in your recent comments section.

Don't take it personally, Mike. I know your blog is just a hobby for you, something you do for personal satisfaction or whatever. If you put up a Paypal donation button, I'd be happy to give you a few bucks for pin money.Mike: Authors who have built a following already and are suffering declining sales are, indeed, good candidates to switch to self-publishing.

Joe: Know who's a better candidate? Authors who have built a following and have rising sales. That's why I got my rights back. Because as my legacy ebook sales began to grow, I kept a running tally of how much money I was losing.

Happily, that money now all goes to me.

Mike: The use of a single-day's data as a base for projecting a year's sales is a particularly egregious error of logic and the laws of probability.

Joe: Which is why it will be great to see Hugh and Data Guy crawl for more numbers. But I can guess the response:

"The use of a week's data as a base for projecting a year's sales is a particularly egregious error of logic and the laws of probability."

"The use of a month's data as a base for projecting a year's sales is a particularly egregious error of logic and the laws of probability."

"The use of a year's data as a base for projecting a next year's sales is a particularly egregious error of logic and the laws of probability."

I suppose I could waste more of my time checking the Top 100 Romance, or Sci-Fi, or Police Procedural, or Horror, but I have a strong suspicion what I'd find. I came upon this suspicion because I've been counting indie authors in the Top 100 for years. Have you, Mike? If so, you'll find that sometimes, on certain bestseller lists, more than half the list is self-pubbed. It fluctuates, of course, but I'll make a crazy prediction and say that the more data Hugh reveals, the more it will show how indies are making a lot of money without the legacy industry.

Or, as William Ockham just commented in response on your blog:

"No, you are just wrong about that. It would be wrong for projecting the earnings a particular book based on its position on that day, but likely to be excellent for projecting the shape of the market."
Zing. Thank you, William.

So I'll repeat my question:

Why do you think any indie author, when exposed to these numbers, would sign with a legacy publisher?

One last gem from Mike, then I really have to get some work done.

Mike: I have a limited appetite for meaningless data interpreted with an ax to grind.

Joe: And I have an unlimited appetite for fisking legacy pundits who say stupid shit. So please, keep it up.

123 comments:

"I mean is that there are people doing it for a living and there are people who are doing it for other reasons, ranging from pin money to personal satisfaction to whatever."

This is what infuriates me most. Mike, now, he's a serious professional. The editors, those guys are talented, and they're professional. The guy that designs the cover? The guy that lays the book out for print, and the guy that formats the book for ebooks versions? The guy that cleans the toilets at the publishing house? Oh, those guys are professionals. They deserve a living wage, because they're providing real, measurable work. Writers, though, they're really just hobbyists, despite the fact that they CREATED THE VALUE THAT LEADS TO PROFITS!!!

I personally know three trad-published authors who've tried self-publishing some backlist and new titles, sold next to nothing, and gone back to their trad deals. That proves your point that having an established presence in the trade isn't necessarily a magic bullet for self-pub sales. I'm aware of one hybrid author to whom self-pub sales create supplemental income; he earns many times more from his trad publisher than he can by himself. All that proves, I suppose, is there are no absolutes.

To claim that *all* authors are better off going it alone is patently false. Some will do better, some won't. I've run my own numbers with my own sales. To earn what I do from my trade deals, including film and translation rights, I'd have to sell astronomical amounts of self-published books, and I'd have to work an awful lot harder than I do now. I'm a lazy bastard, so I'll stick with what pays the most with the least hassle, thank you very much.

On the point of subsidiary rights - a good agent will keep those and hustle to gain the most revenue from them. Even a midlist author like me can make good money - I'm talking six figures annually in my case - from subsidiary rights without having to lift a finger, so long as those rights are handled well. That's what my agent earns his 15% for.

It's a big ocean for authors, and there are many ways to navigate it. There's a lot of useful info out there; it's a shame one has to dig through so much invective to find it.

I don't like to post anonymously, but this is a hostile environment for anyone who doesn't toe the party line. Is that cowardice? Maybe. But it should tell you something that those who have something to contribute to the debate don't feel they can do it openly without being met with hostility.

And, sorry, but I can't resist: "Two out of five make money, two break even, two lose money, last I spoke to my old editor." Um, that makes six out of five.

Joe, first, kudos for debunking the many things Mike Shatzin have said which ranges from wrong to awfully wrong.

But I think it's healthy in these days to have a critical mind, because when there is war, or dispute, disinformation is a weapon wielded by both sides.

Apart from the obious "Two out of five make money, two break even, two lose money, last I spoke to my old editor" which make 6 books and not five, there are far more important things which strike me from the recent studies:

- the first study is very valuable for authors, but still, it accounts for only the 7000 top-selling ebooks. That's strategically very important to get an idea, but that's still the top of the iceberg.

- the second study, the Bookscan report, is not very reliable: as Data Guy could confirm you, Bookscan just accounts for 30 to 50% of print sales. So it's not enough, by a far randge, for the report to be reliable.

But that's something we indies have to point out: the return system obfuscate in a BIG way sales of paper books, so legacy authors have to rely on the word of their publisher when it gets to paper books sale. They are far more lilely to be put in a victim's position.

And to reply to anon's recent post: he had managed to get decent subsidiary rights, bravo, but that's a very hard thing to do today with legacy publishing. And playing legacy pub from the start (without previously self-publishing) is a huge, huge gamble.

If you missed it, Hugh touched on this during the Author Roundtable webcast this week. He cited that he's met and spoken with scores of mid-level people in BigPub who would love to implement changes of all kinds that would help writer's and better attract top indies.

He says ideas and innovation gets up to a certain level and they die. Usually at the top tier where execs are "smoking cigars in sauna's and making big deals."

I imagine you get to a certain height in BPH management and it's strictly money, not stories and writer's, who matter most and with record profits off of digital (and the backs of writer's) there's simply see no reason for them to change.

So they won't. Until the floor drops out. It's hard to implement effective change and innovation while in a freefall though.

Ah, and another thing I wanted to point out again (and sorry for the typos of my previous post), is that dates matter. You don't sell as many paper books in december as in january. Yes, an annual report would be marvelous.

Coming from other industries where a new business model arises out of nowhere, I can tell you that the big incumbents pretty much NEVER figure out how to jump on board. The entire organization fights against it.

Here's a good article on the topic (not publishing-related). http://blog.learningbyshipping.com/2014/01/18/if-at-first-you-dont-succeed-disrupting-incumbents-in-the-enterprise/

By stating that everyone would do better to self-publish, Hugh unfortunately diverted the focus of the post and the initial numbers. Anyone can point out exceptions to a rule and feel validated that they've refuted the argument, as Anonymous of 6:14 AM did.

BTW, kudos to you Anon for doing so well with the path you chose. You are correct that it's a big ocean and there are lots of ways to get across. How many of us, though, are fortunate enough to find one of the good agents, as you did? How would your path have changed without them?

The point that everyone but Hugh, Joe, and some others seem to be missing is the elephant-sized chunk of the profits that the Big 5 take to support plush offices and martini lunches.

Some authors will still choose to go the trad route, in spite of all the numbers, but they should do so with their eyes fully open and aware of the consequences.

Mike has really gotten emotional with his response to this report. In the comments when someone points out that Hugh has uploaded more data (the very data that Mike says is missing) - he says he's not reading any more updates on this report - like a petulant child refusing to eat his vegetables.

Another comment points him to a good article on HM Ward turning down a huge advance. He says he has no interest in reading the article because it isn't his business. Isn't knowing the publishing business exactly his business? Ignoring the self-publishing part of the business - is kind of like - I don't know - ignoring the print part of the industry.

By the way, Joe, I loved the part where you said you called the Department of Labor on his parents - that was freaking hilarious.

I'm a brand new author. A literal complete unknown, and I self-published my first book two months ago. How am I doing? Skip to the bottom to find out.

If traditional publishing had been my only option for having my work reach readers, my book would never have been written. The time and effort that goes into obtaining an agent is only the first step. I'd then have to wait on a publisher willing to take on my work, and as a complete unknown, I would be at the complete mercy of the publishing house. As of December 2013, I had no fan base.

I'd receive a horrible advance and terrible contract terms (not unique to new authors). Maybe a year or two later, I'd see my book in print. But, then again, maybe not. In my opinion, traditionally publishing is a scam, and I cannot understand why authors are willing to defend it. It's like an abused wife defending her husband for beating her. As an unattached observer, you watch from the sidelines shaking your head at how sad it is.

I've spent hundreds of hours writing and editing my work. Don't get me wrong, I love the work, but it's still work. Hard work. The thought of committing all that time and effort for $2500 or, best case, $5000 and signing away my rights forever would be enough to make me give up the endeavor completely. It is in fact why I never bothered to start. I'd rather earn $0 and live in obscurity than take a few thousand bucks. I have a day job here, I'm not desperate.

Because of the ability to self-publish, and for only this reason, my book was written, and my second book is halfway done. My only barrier to seeing my next book published is how fast I can turn it around. That's all kinds of awesome, and I'd so much rather spend my efforts building my platform than slaving away for peanuts for some corporate overlord getting rich off my back.

So to reiterate.

1) New Author2) No fan base. I've never blogged, etc.3) One book is the entirety of my "back list".4) No prior writing experience. I've spent my career in the IT industry, but I sure as hell know what I like to read.5) I did no promotion other than telling my friends, "Hey look at me! I wrote a book!"

So how have I done my first two months?

I've sold just under 1,900 eBooks in 8 weeks and I've earned just shy of $5,000. I've been on several fantasy genre best seller lists for weeks. Not bad for a newb.

I will NEVER sign away rights to my eBooks unless the contract was so absurdly lopsided in my favor I'd be stupid not to. But, I don't see that happening anytime soon.

How many more new authors feel the way I do? People that are writing and publishing for the first time because they can do so under their own terms and never would've bothered otherwise? I think more are emerging every day. We're a new breed of author, and I love it.

I personally know three trad-published authors who've tried self-publishing some backlist and new titles, sold next to nothing, and gone back to their trad deals.

Uh, how can you go back to trad deals when the books sold next to nothing self-pubbing? Their publishers offered new contracts for books that weren't doing well? Sounds generous, and unlikely.

As for selling next to nothing, ebooks are forever. Reread the bit about ORIGIN.

That proves your point that having an established presence in the trade isn't necessarily a magic bullet for self-pub sales.

No one ever said there was a magic bullet. But self-pubbing offers a much better long-term shot at making money than legacy does. I've been saying this for years, but I should have repeated it in this post.

I'd have to work an awful lot harder than I do now.

Look at the data I posted once more. You can make 5.6x on your ebooks by self-pubbing with a tiny bit more work.

I'm a lazy bastard, so I'll stick with what pays the most with the least hassle, thank you very much.

Do you read my blog? The amount of time I spend on non-writing aspects of this business dropped dramatically once I began to self pub. But then, I signed at 1200 bookstores, so I'm probably an anomaly when it comes to working hard.

Even a midlist author like me can make good money - I'm talking six figures annually in my case - from subsidiary rights without having to lift a finger, so long as those rights are handled well. That's what my agent earns his 15% for.

Indeed. Which I mentioned in my post. And I'm not sure a six figure income qualifies as "midlist" these days. But kudos on your success.

It's a big ocean for authors, and there are many ways to navigate it. There's a lot of useful info out there; it's a shame one has to dig through so much invective to find it.

The invective is warranted. Shatzkin is a well-respected industry pro, and his poorly constructed arguments are harmful to authors. I believe I matched the tone of the dismissive comments he left on his own blog, except I'm funnier. Pin money? Really?

I don't like to post anonymously, but this is a hostile environment for anyone who doesn't toe the party line. Is that cowardice? Maybe. But it should tell you something that those who have something to contribute to the debate don't feel they can do it openly without being met with hostility.

I regularly kick out people who are hostile in the comments section. The only one who I allowed to be insulted is me. And the only ones I insult are anonymous pinheads.

You are anonymous, but your comments have been smart. That respect will carry over if you choose to sign your name.

"Two out of five make money, two break even, two lose money, last I spoke to my old editor." Um, that makes six out of five.

LOL. I ate a big steaming bowl of fail there, didn't I?

It's 1 out of 5 books earn money, as referenced from an older blog post. Good catch. I'll fix it.

Oddly enough, when you think about it, even without a shred of data, math will still support the decision to self-pub.

If you're going for traditional publishing, you're trying your luck with, at the very most, hundreds of publishers; all of which have to consider very carefully if they'll want to invest thousands of dollars in your writing.

If you're self-pubbing, you're trying your luck with, potentially, millions of readers; all of which have to consider, rather casually, if they'll invest a few dollars in your writing (or less than ONE dollar, if you sell at 99 cents).

In terms of luck and probability, that looks to me like an absolute no-brainer.

But having the data to support the probability-math is incredible icing on the cake, so tons of kudos to Hugh and Data Guy for enlightening us!!! ;o)

And Netflix will probably replace DVDs. Publishers being in denial won't push technology back, they'll just fail eventually if they don't keep up.

I've thought a lot about clouds and streaming and disagree.

DVDs, BluRay, and CDs are physical data storage for digital files. People like physical media, but only if they can use it on digital devices.

For example, most DVDs and BluRays come with a digital download code or disk, so the movie can also be played on computers, tablets, smart phones, etc. And CDs can be ripped to mp3s. When was the last time you saw someone with a CD Sony Walkman? And yet, CD sales haven't gone away.

Paper books, however, can't be read on your Kindle.

Do you know that, in 2007, I told a room full of NY publishers that readers who bought a hardcover should get the audio version and ebook version free? I said this at the Google Unbound conference, before the Kindle was released.

He's 66? That explains a lot. While that's not really old these days it's enough to be unable to change your way of thinking substantially. Especially when all he's ever know is authors clamoring for a legacy advance.

Does it matter that I'm only making Starbucks money right now self-publishing? Not really. Because I know that will increase with each new release.

Most importantly, it's more than I would ever make while impatiently waiting to be rejected by legacy pubs.

Apart from the obious "Two out of five make money, two break even, two lose money, last I spoke to my old editor" which make 6 books and not five, there are far more important things which strike me from the recent studies:

I updated my blog, but left that error in. When I screw up, I should be called on it.

the return system obfuscate in a BIG way sales of paper books, so legacy authors have to rely on the word of their publisher when it gets to paper books sale. They are far more likely to be put in a victim's position.

Reserves against returns are rife for abuse. Every dollar a publisher can without from an author is capital they can invest. Holding onto author funds for a year or more is inexcusable.

One of the things Mike Shatskin says is point 9 in his latest blog post

"Publishers can raise royalty rates or lower price) when it becomes compelling to do so. Which brings us to the final point that I think is relevant and ignored. As Howey and others have pointed out, the early days of ebook publishing appear to have been good for publisher margins. They can afford to give authors more. In fact, I encouraged them to do that before their accounts come after them for the extra margin in a post nearly three years old. But they’re not going to give it out of some spirit of generosity or because Hugh Howey or Mike Shatzkin thinks it would be a good idea. They’ll give it when it is a competitive necessity to do so."

Yep. Obviously. Publishers are in business to make money. Not to be nice to authors. Not to help authors make a living from their writing. A publisher's job is to make money. I assume its theoretically possible that a publisher could create a business plan that was reliant on making the authors happy but at least the big publishers? Not their plan. I get it. I really think all of us authors get that. We really do.

But for many of us writers, our main goal in life isn't to help a publishing company make money. I get no particular joy in life from telling my children at the dinner table about how well Simon & Schuster is doing these days. Rather, I get excited when I can put food on the table. And that happens when I make money.

That is why so many authors are so excited there is a new business model out there. We no longer have to write just for publishing houses who mostly care about making money. We can leverage Amazon and other e-book platforms who have figured out how to make money in a slightly different manner than the major Publishing houses. And it just so happens that this new way greatly benefits many of us authors.

Is any of this automatic? Nope. I don't know of anybody on either side of the discussion who has ever said that.

But I guess I'm curious, why the hell do Mike and Steve and Donald and so many other in the traditional publishing world even care about this self publishing thing? Because it sure seems like you care? Especially lately.

If your business is fine, and you've got plenty of authors who write good books, then why do you care about us? Just leave us alone.

Maybe its because you're tired of us grumbling about the way you do business with your contracts and bad royalties and all that. Who cares? You're all big boys. You can handle underlings complaining can't you. I taught for years. Students complain, that's life. So what if we complain? Our grumbling certainly isn't hurting your business, right, so why do you care? Let us grumble.

Maybe, maybe its because out of your generous spirit you care about what happens to authors who are being duped into a life of penniless servitude by going out and self publishing their work. Wait, that doesn't make sense. You've made the point that Publishers are in the business of making money, that they are not going to make changes in their business model out of the goodness of their hearts. Fine. So why do you care about self published authors? Again, just leave us alone. Let us have our author earnings reports and let us talk among ourselves. You go do your thing and we will do our thing.

You may object and say "well, we just want to clear up any confusion being caused by Hugh and grumpy Joe and others who are dangerously misleading people into the unsustainable and unprofitable world of self publishing".

Well, no you don't. You don't care about that. You keep reminding us that don't do things out of the kindness of your heart. You do things for business, that's what you always tell us. You don't need to change royalty structures because you don't need to. You don't need to change non-competes because you don't need to. You don't need to offer print only deals because you don't need to.

The Big Publishing company types and their businesses are doing just fine. They are businesses. They do things for business reasons. Geesh.

Of course, if business isn't so good and you forecast trouble on the horizon? That would be another story entirely. If that day ever happens (and I'm sure it won't) but if it ever happens, you big publishing types might be looking to adjust your business model. Unfortunately, I don't know of any large businesses headquartered in Seattle who are tinkering with different business models for publishing so I wouldn't know where to begin.

In the meantime, I'm sure most people can agree that giving authors as much transparent information as possible will help authors make the very best decisions about how to proceed with their individual careers.

But for many of us writers, our main goal in life isn't to help a publishing company make money. I get no particular joy in life from telling my children at the dinner table about how well Simon & Schuster is doing these days. Rather, I get excited when I can put food on the table. And that happens when I make money.

I just thought this was worth repeating. Nicely said.

It also emphasizes the disconnect of Shatzkin, Zacharius, Maass, and others, and reiterates what Ann said. They simply don't care about our financial situation.

Thanks Joe for your rebuttal. The main challenge is to see ten years from now. A terrific writing challenge is to report on books as a biz columnist ten years from now. And then in ten years laugh at how wrong we were.

If one looks around free from personal denial, there will be far fewer bookstores. That seems the most obvious trend afoot this past ten years. Also, digital content is clearly a revolutionary advancement not to be stopped.

When I founded my small indie fiction ebook press I struggled mightily in drafting a viable contract I felt would be fair ten years from now. Our agreement provides our authors 80% of the net proceeds, which I hope will allow me to pay myself and other highly skilled publishing people as the future unfolds. Remains to be seen. Typing on phone apologies for auto correct oddities. Great conversation. Revolutionary change in other entertainment businesses originated from the unexpected outsiders.

Not saying, he's all wrong, but guys like him and Maass know that the folks who pay their rent and send their kids to college are reading all these blog posts very carefully. You need to make sure that Big 5 exec or editor still wants to extend your consulting contract or look at your client's manuscript.

So you have to think that Mike's incentive to say and do anything to dismiss Howey's conclusions is much greater than Howey's incentive to defend those conclusions...

Anyway, it's probably going to get uglier over the next month or so, especially with Publisher's Weekly sending out the "Howey is wrong" update in its PW Daily email this morning.

Thanks again to Howey and Joe and the scores of other successful indie writers who are sticking their necks out and taking some hits to clear the path for the rest of us.

You write, "I notice newbie self-pubbed authors signing legacy deals. I also notice them declining legacy deals. But how many former legacy authors go back? And how happy are those newbie authors who sign legacy deals? Where are their ringing endorsements?" [emphasis mine]

A question I'm asking myself, especially after my publisher offered an 8-figure-for-three-book deal in hopes of recreating the "Fifty Shades" frenzy at their house.

I'm not trying to pretend to any extraordinary altruism here, I'm as greedy as the next author, but when I think of all the authors at my house, yes, including me, who have never seen an offer of anything over 6 or 5 or even 4 or 3 figures, authors they have spent years allegedly nurturing? And then they pay that much for an author they bring in from outside the house, for an advance that will never, ever earn out, no matter how many books they sell? And they're not going to sell anywhere near "Fifty Shades" anyway because the copycatters never do?

At this point never mind that they're only offering a laughable 25 percent e-book royalties. I--we have a moral responsibility to never again support the fiscal irresponsibility of my legacy publisher by ever signing another contract with them.

If I were still working for BP and they paid an enormous figure for a second generation oil field that was never going to earn out its investment no matter how high the price of oil got? There would be shareholders with signs marching up and down outside the building, and the CEO would be out on his ear at the next shareholders meeting. I have never understood how legacy publishing, as an industry, gets away with this crap.

Well, I just got done with a short conversation with him about business failure and why it occurs. Boring I know but an important oversight when the contention is that business adapts when there is a need. Frankly some businesses do not adapt which is precisely why they fail.

Mike seemed to think that meant I assumed the publishers were 'abjectly stupid' which was a slight leap in logic on his part, but I'll be a big girl and pull up my big girl panties and address the final point he made instead.

I stated that more and more authors will inevitably be asking the question: what benefit is there in signing with you?

His response was to suggest one such offering was scale. Given the context of my question - I said that people are becoming more technologically adept and will continue to become more so - I find that a puzzling answer.

I think the underlying issue is the constant call back to paper distribution. When I'm sitting on a plane or train I'm not seeing people reading paper copies of genre books. I see people reading with their iphones and tablets. I don't think that's likely to change any time soon, if anything it's going to be a continuing trend. What scale can you offer me or anyone else that I cannot match myself given that we're moving (or have arguably moved) into a digital era? I too can press a publish button and be on shelves around the world.

In conclusion, the future potential offering of paper distribution really doesn't mean anything to me. You can print 5,000 copies of my book so that you can pulp 3,000 copies of them? My heart bleeds for the environment, truly.

P.S. I'm assuming he meant paper distribution by scale. Scale in terms of digital distribution wouldn't make any sense considering we already have that.

This reminds me of another debate I just watched, with Bill Nye and some other guy.

In this instance, I'd have to say Joe is Bill Nye, and Shatzkin is the 'other guy' who floundered all debate, repeatedly trying to reinforce his own beliefs with bad data and outdated information (there WAS a time when everyone thought the world was flat and only 6,000 years old).

The problem for me isn't that Joe is on the more believable side (and Hugh and Data Guy etc). The problem is watching the Shatzkins of the publishing world still trying to tell us that the world is only 6,000 years old, and might even still be flat.

It's painful. It's as painful as the youtube vids of a marriage proposal gone wrong, or three stoned kids making a stupid video that only they understand while the rest of us cringe.

To be honest, it's disturbing. I'm not 100% convinced that Hugh and Data Guy's numbers are entirely accurate, but I am 100% convinced that they are actually doing everything possible to get to the bottom of it, and that the 'bottom of it' will eventually see the light of day. Meanwhile, in Publishing Land, they seem to be cherry picking their data, incomplete and even incorrect at that, just to keep making the same tired, embarrassing argument.

I truly cannot wait for a month or two to pass and all of the numbers that Hugh and Data have been leeching off Amazon (let's not kid ourselves and pretend Amazon isn't the dominant force these days in terms of all types of books) show the same thing the numbers this week have.

Even better if they can somehow get some numbers out of B&N, as I'm pretty sure that while B&N will be slightly skewed to print, their numbers will be pretty convincing the same as Amazon's numbers are.

It's just sad that whenever I read these posts from Joe, I cringe and shudder and feel sorry for the Shatzkins (a new generic term for industry old guard defenders).

Then again, the Romans didn't really know they'd been defeated until the enemies crashed the gates (even though they saw it coming for a century or more as their borders shrank all the way back down into Italy).

Hugh's data makes a tremendous impact. Yes, it is a thin slice and represents a small sample. As that slice is added to and the sample increased, reality will strike. The data is better than anything currently available. The naysayers are certainly indicating fear of some kind, by their dismissals. Perhaps they are seeing an impact from the growth of self publishing - not just social [agents and publishers are not as good as they should be] but also financial - there are some lost opportunities for the Big 5, and the aggregate indie sector represents one heck of a competitor that traditional publishing can never defeat or takeover, as much as they might try.

I'm looking forward to both Hugh's next data set release and the next one and... plus Joe's fisking. Marvelous word that.

"To be honest, it's disturbing. I'm not 100% convinced that Hugh and Data Guy's numbers are entirely accurate, but I am 100% convinced that they are actually doing everything possible to get to the bottom of it, and that the 'bottom of it' will eventually see the light of day. Meanwhile, in Publishing Land, they seem to be cherry picking their data, incomplete and even incorrect at that, just to keep making the same tired, embarrassing argument."

"Howey mentions that editors and cover designers can be hired. That’s true, and good and competent ones too. But is a good writer necessarily a wise chooser of an editor or of a cover design?"

I just had to comment on this. I have a very, very small deal offered to me for my current series, plus the next book that is a WIP. The publisher was a new imprint, however, the guy in charge and who I spoke to, used to be a deputy VP for one of the Big 5. He asked me who did my covers because he seemed to think they were good. He was kind of surprised when I said a friend (Imogen Rose) did one, and we both did the second and third covers. I did the fourth.

Anyway, that wasn't my main point-- my point was that the person who put me in touch with this publisher was my freelance editor. She also freelances for this new imprint and knew they were looking for titles to help build their catalog and recommended mine. I take it that means we both have good tastes in editors? Also, how ironic is it that the tiny advance they offered me was LESS than I had paid my editor for each of my last two books? What a deal for the publisher! (if I had taken it, that is!) They would have had two books already edited by the same editor they already use, and it would have been free to them! They had generously offered to cover the expense for her to edit my WIP when it was finished.

I'm not getting rich (yet) but at least if I self-publish,I stand a chance of reaching a lot more readers.

I understand that by self publishing, I am making a commitment to doing additional work such as getting a cover, finding an editor and promoting the crap out of my work. Well, maybe the last would be true either way.

But, I'm not spending time courting agents or publishing houses. As I've not done these things, I assume there is a significant amount of work involved. I also assume that there is a lot of loss time waiting for responses. I've never tried to quantify either value.

It's not like we just plop out a book and it ends up on a shelf. Something has to be done to take it to the next level.

When you compare the time and effort it takes to get traditionally published are we really doing more work self publishing?

Now, I'm going to defend Shatzkin. Ok, not really, but I am going to explain his POV and suggest that we all need to watch out so that what's happening to him doesn't happen to us. Also, you can learn a lot by reading someone who is smart, experienced, thoughtful, and dead wrong. And he fits all those categories.

Sometimes when you study the wrongness of someone who "knows the business" you discover that they knew something you didn't and they were right after all. That's a huge win. Other times you have to unravel why they are wrong. This is the sort of puzzle I love. I can honestly say I've learned more from figuring out why Shatzkin is wrong than I have by reading Joe, Barry, et. al.

The crux of his problem is indirectly revealed in this statement:

My problem with the whole exercise is that there is a long list of relevant facts not included in the data and therefore ignored in the subsequent analysis...

The key word is "relevant". This is a clue that his real problem isn't going to be any of the stuff he says, it's his model of publishing reality. We all have filters to screen out unimportant data so we can focus on important data. You work for 50 years in an industry and you get a very finely honed set of filters to help you establish relevance.

Those filters are built up from a core set of factors whose interactions combine to drive your conceptual view of the industry. As long as your simplified view allows you to evaluate data and predict outcomes, you can continually refine the model.

The danger is that something changes at a very fundamental level that invalidates your entire set of filters. Those fundamental changes don't usually happen overnight, but even if they do, the effects will lag long enough that you will be blindsided by the impact. You experience your own personal Copernican revolution.

Take a look this piece of logic:

I know of one Big Five house that calculates that they pay more than 40% of their revenue to authors ...How can you compare how authors are compensated if you don’t calculate the benefits to authors, meaning the resulting higher percentage of the revenue they’ve taken, of unearned advances?

I am going to assume this is true because he's in a position to know. It's also astounding to me. And I don't think that Joe's response really accounts for the whole story. The big advances being paid to bestselling authors is a real thing AND that can't possibly be the whole story behind the difference between indie and legacy royalty rates.

This tells me something really important that Shatzkin will never see and I bet most of the folks here haven't grokked yet. On the customer side, money is coming in to the system from somewhere and money is leaving the system somewhere else. Quick example, if a customer who spends $60/year buying 4 bestseller hardcovers at a physical bookstore reduces her spending by only buying 3 this year, but I spend $15 more this year buying 3 extra $5 ebooks, the net amount of money in the industry stays the same, the unit sales goes up by 2, the print/ebook (and online/offline) mix shifts a bit, but none of those things (which are the metrics everyone is watching) captures the most important change. What matters is the change in the customer mix. And the only big player who gets that is Amazon because they are the only ones right now who can see it. It's no accident that Amazon published authors came out so well in the @AuthorEarnings data.

I've been struggling with how to measure the extent of the transformation in where the money comes from in publishing and Shatzkin just handed a metric to me. He thinks it shows what a great deal legacy publishing authors are getting. I think it shows that legacy publishing is facing a Lovecraftian future (you know, a gradual descent into chaos and madness).

"The most merciful thing in the world, I think, is the inability of the traditional publishing mind to correlate all its contents. They live on a placid island of ignorance in the midst of black seas of infinity, and it was not meant that they should voyage far. The outliers and anecdotes, each straining in its own direction, have hitherto harmed them little; but some day the piecing together of dissociated data about Amazon sales will open up such terrifying vistas of reality, and of their frightful position therein, that they shall either go mad from the revelation or flee from the deadly light into the peace and safety of a new dark age.

H.P. Lovecraft, "The Call of Self-Publishing"

William Ockham, you are my new hero. Your describing traditional publishing's future as Lovecraftian made me blow coffee out of my nose.

The danger is that something changes at a very fundamental level that invalidates your entire set of filters.

We can substitute "filters" for "values" and have an explanation most of the intolerance in the world.

Good assessment, as always, William. I'm curious. You've been around the publishing forums for a few years, but I'm guessing you've been around longer, and at one point you were using your real name. What make you switch to the pseudonym? Purely curious, no need to answer if you don't want to.

The thing that gets me is that this kind of disruption has happened before in several other industries. Depending on how you view Amazon's entry into the book world, it has already happened once in the book industry itself! And yet traditional publishing seems to feel no need to acknowledge this. Trad publishing could be looking at other verticals that have been disrupted by digital, etc. and learning from other legacy industries mistakes. But they stubbornly resist this use of history as a teacher. Just having "legacy" applied to your industry should be a motivator!

DAMMIT Joe! You keep writing these great posts and I keep reading them obsessively! I'm getting no work done and as a self-published author who now makes a living at it, I have to work! But as my own boss, I just decided to give myself a day off, so I guess I can enjoy without guilt. ;)

I'm one of those authors who went from obscurity to making a good living off self-publishing in one year. Yes, one year.

I get a bit sick of seeing detractors talk about the heavy investment that self-published authors must make in time and money on the business side of things.

I wrote my genre book, which took 150 hours. I sent it to a bunch of beta readers, who gave me free feedback. I revised several times. I paid an editor $1,000 to edit, which I consider cheap. I paid for cover art from a professional designer for $135. I published on Amazon's KDP for free. I paid for some minor ads, totalling about $100. I paid for a BookBub promotion for $240. All told my investment was $1,475. That and 150 hours of my time, which I would have put in anyway, because I am a writer.

So far, I've made $130,000+ in ten months on that book alone. Not your level of success, but AMAZING to me. I subsequently published two sequels and have earned another $40,000 in 4 months from them.

Few will have your level of success, but if they do, it must feel pretty damn good knowing you did it yourself. More will have my level of success -- good enough to quit my day job, which gave me half as much as I earned in a year as a self-published author. Most will have smaller success, but that's the case with those authors who sign with traditional publishers. In the end I think we self-published authors, and hybrid authors, will do better in the long run.

Thanks for fisking Mike. It was truly merited and I thoroughly enjoyed it.

" When I'm sitting on a plane or train I'm not seeing people reading paper copies of genre books. I see people reading with their iphones and tablets. I don't think that's likely to change any time soon, if anything it's going to be a continuing trend."

I'm a dentist who recently started self publishing (5 short story packages, a collection, a non-fiction thing and some more in the pipeline), and one reason I'm slow at getting things up is because I'm not slow at my office. I see a lot of different patients, and a lot of them read, and I have noticed this trend as well - most of the patients bring in a tablet or a Kindle or Nook and read on that, and the younger ones read on their phones. I joke that we no longer need to subscribe to magazines; I'm actually thinking of buying 5 kindles and handing them to patients when they are seated in an operatory. My own reading habits have changed since getting my Kindle a year ago. I am reading a lot more, and much of it is indie fiction. I wait for my fave big names to come out in remaindered additions. I've run out of shelf space in the house, so more and more books are ebooks now.

I'm not selling much, but I really don't have much visibility, and forever is a pretty long time. Maybe I'll worry about it when I retire from dentistry. :-)

2. You're fucking kidding about opacity, right? Have you ever tried to decipher a royalty statement? Get an honest answer about print runs? Name a publisher that lists how many ebooks they sold last quarter.

The legacy industry has counted on hiding data and keeping authors in the dark. Amazon's secrecy has a hundred-year old basis in how publishers do business.

Cader also said "BTW, if Amazon were to disclose their data in a Bookscan-style system, the other major players would happily participate."

Bookscan is a third party, and if memory serves, publishers didn't like it at first because they didn't want anyone to know how many books they were actually selling.

If publishing data was so transparent, why is Bookscan needed? If everyone had been forthcoming with their sales, there would be no need to track anything.

Cader goes on:

Have authors simply accepted Amazon's damaging secrecy, even as they take almost nothing else about the publishing process for granted?

Huh? Amazon provides me with all of my numbers, monthly. No secrecy, and the data is detailed and clear.

They also provide EVERY PUBLISHER with similar data.

I'm transparent about my numbers. If the Big 5 were equally transparent, we'd have a VERY clear picture of actual sales figures.

But that's never gonna happen, ever. Because publishers have always hidden their figures, and always will.

Can a newbie author chime in? I published my debut novel last summer with a small press. To date, I've received about $46 in royalties. That's it. The first round of cover art was terrible. Terrible! I wanted to cancel the contract, but the publisher said they had sole decision making as to what went on the cover and wasn't it nice for them to even show it to me? I'm self-publishing my second novel on March 1st. I'm using the same editor for this book. I LOVE my cover art. Thank you, Jason Gurley. And I love having control over my work. I chose the cover art. I decide when a print and audio version will be available. It's about more than making pin money. It's about control. And if my book makes more than $50, then wow! I've broken new ground.

My bottom line: I could NOT care less about print. I make my books available in print for those readers who prefer it. That's it.

Will people still be clinging to the "print is important" band wagon two years from now? Did record companies shout "CDs are an important source of revenue" when iTunes was selling songs hand over fist?

I'm sorry, but anyone with a brain can see that print will soon be a small contract negotiating point and little more.

I was legacy published. I hated the whole process so much I quit writing for 20 years. Then self-pub came along. I formatted a book myself, designed the cover and hot damn I'm making enough to buy dogfood! I was part of a writer's group until I got sick of them saying I couldn't succeed with self-pub, that I couldn't succeed without marketing. So, here I sit doing nothing for that book and at the end of January I got an income-earned tax form from Amazon. SCORE!!Stephanie Lilley (not my legacy name)

I've been thinking about this on and off since the discussion of the "power readers" came up a few weeks ago. Your razor is slicing to the truth here.

10% of the readers are consuming 90% of the books (however you want to split up the numbers, it's clear that a small number of readers buy a disproportionate amount of the books) And those readers are increasingly moving to digital modes of satisfying their habits. They're probably spending similar amounts of money, but getting more books for their dollars.

I'm in my local Walmart, Target, and B&N relatively frequently. The book sections in the first two are populated only by crickets. It's truly rare that I see anyone browsing those areas. B&N usually has a smattering of customers, but many are there looking for something specific. If it's not in stock, off they go.

These are personal observations and anecdotes, but they ring true based on the changes in my own buying habits since I got a Kindle. It also makes the huge disparity in the print vs. ebook numbers on Amazon from Howey and his Data Guru make even more sense.

Bookstores can't make it on sales from the casual reader alone. Once the power readers all move digital, only the blockbusters will shift any significant copies in print.

Ok, I've never posted here before.... but I'm going tp post an exchange that just happened with me and Mike, and it still blows me away. No comments, just posting it, un-edited. Wow, just wow.

You'll see why:

nedwriting • 42 minutes ago

Mike, I'm a writer who has sold about 3,000 books in the last month. Print, e-book and audiobook. I've worked with publishers large and small over the last 15 years, and have been repped by multiple agents.

Frankly, I have no interest in any "stinking advance." Of any size. What I'm interested in is NET profit to author (me) for my book. If that's big enough, I'm willing to forego any advance at all.

At the end of the day, show me the money. Not some loan.

Mike Shatzkin • 26 minutes ago

But what if a publisher offered you an advance that you figured was *larger *than whatever you would earn by any calculation of sales and net revenue? You wouldn't take it and be content to have some of it "unearned"? If so, I admire your principles but I'm glad I'm not your business partner.

Mike

nedwriting • 16 minutes ago

If said advance allowed me to retain the rights to publish all future books -- and the current book in any form I wish, on any platform, then yes, I'd take it. I'd be happy to "rent" my book to them for a period of 5 years, but retain all rights after that time, and I reserve the right to publish what I wish to publish on any platform I choose.

I don't see the publishers lining up with that offer, do you? And therein is the problem. The terms offered -- and the strings attached -- to current contracts today would be stupid for any business partner to take, including you and me.

Mike Shatzkin Mod nedworking • 8 minutes

Ah, details. And pointless ones too. Of course you can figure the net present value for future earnings that are compromised: for five years or a lifetime. What difference does it make to the calculations, except in the details of how you do them? This is not a conversation about what's best for an author financially; it's a conversation about what in today's publishing terms really strikes an author (you, in this case) as particularly annoying. OK. But a lousy way to make business decisions. Mike

nedworking • 3 minutes ago

Wait, giving up my IP for my entire life is "pointless" ? Wow.

And ham-stringing my future earnings to a partner (publisher) who fails to perform, who has not provided me with any way to negate the deal, just "annoying." Not hardly.

That's not the way I operate in my day job for big companies. And not the way I run my writing career.

Would you trust a business consultant who doesn't give a damn about whether a contract lasts 5, 35, or 105 years? Who thinks the future is so knowable that NPV can be perfectly calculated? Who apparently doesn't know about counterparty risk?

At one time Mike was known as a "futurist." Maybe he needs to take up with Miss Cleo in Ye Olde Bullshitters Home.

the take away I snagged from Mike's post was that GENRE AUTHORS should absolutely self publish. However, for those of us with less genre specific books we would like to sell to a reading audience are---fucked? I mean, 'scuse me. I am crazy about you Joe and between you and Hugh Howey you are huge inspirations to thousands of (less talented) authors.

I have some books that got shoved into "romance" because they have relationships as a big part of their story arc. However, I been assured by the majority of the hard core romance reading audience that I have NO BUSINESS calling what I write "romance."

I humbly agree. So…..where do I go? I have 20 books published, but because I got such strong reactions both good and bad because I was marketed to a romance reading audience I'm stuck in a big way.I'm getting stuff edited right now at a pretty big expense to me (I like the guy but he is expensive) and have NO effing idea what to do with it after…

"But is a good writer necessarily a wise chooser of an editor or of a cover design?"

I don't know. Let's hear from some inhouse artists. @2:36

http://youtu.be/l2Z86L25v30?t=2m35s

"One of the favorite covers I've ever worked on is The Dinner. We ended up doing version after version after version and we ended up with the very first cover we started out with. In the end, it was the author who convinced us to stay with the cover we had from the beginning."

Mike, that comment up at the top, super arrogant, on your part.

I'd hope publishers are good at business, not art. Likewise, I hope authors are good at writing, not illustration.

I'd wager there's probably as many authors capable of creating good covers as there are publishers of doing so. Mike, I don't know why you innately think you're better at it.

P.S. I didn't go to business school. I don't know how to run a company. However, I did ink comics for DC. I could call up any one of my friends and get a book cover done at a fraction of what you guys pay.

Mike seems to have forgotten that before Amazon proved ebooks could be lucrative, that the standard royalty rate for ebooks was 50% of list price. Then, when money was proven to be there all the publishers, AT THE SAME TIME, dropped the standard to 25% of NET. (Gee, another collusion? But, one too small-potatoes for the DOJ to go after.)

Can the publishers afford to raise ebook royalty rates? Well, at one time they thought 50% of list was a great royalty rate for all involved, author and publisher.

What short memories they have.

"can’t “prove” this so I won’t try, but it bears further emphasis that it still looks like the number of authors who start as self-published and then get “discovered” by the establishment and switch over is still larger than the number of authors who say “keep your stinking advance” and turn down a deal to do the publishing themselves."

Yeah, this is because publishers and authors don't usually release press releases for those who say "Keep your stinking advance." The PR releases happen only for those who DO sign with a publisher. So, this is a PR bias, not a factual reality.

Joe, do you have any idea who you are taking on? Mike Shatzkin is "a widely-acknowledged thought leader about digital change in the book publishing industry"--it says so right on his website bio (which I'm sure was crowd-written). In one of his long-winded comments (only the Shatz is allowed to write long comments on the Shatz site) he pretty much said Hugh Howey is a crappy business analyst. Well, I happen to be a "widely-acknowledged" most-awesome business analyst and I can see that Hugh has a brilliant business mind. The other guy: pure dinosaur. What I don't get is: Why would you read this guy's blog, Joe? I read it because you linked to it, damn you, but I'd never bother reading it again.

P.S. I'm a lit fit guy finishing my first manuscript, and I would never consider approaching a publishing house (well, cause I'm a biz guy as well).

Yes, Mike is as entrenched in the NY publishing industry as one can get. He has a family legacy there. I always read his blog because of that. He seemed to know things that I wanted to know.

I can't remember, however, a post as hostile to authors as this one. Howey's data set is imperfect, yes, but it's improving. It's an ongoing project. To tell non-genre writers to "ignore" it? That's awful.

As I recall "Terminal Velocity" was a thriller about going too fast. I think Mike is saying that things are going too fast in traditional publishing. It was more fun issuing rejection slips like a small town cop in a speed trap than dealing with paradigm collapse and disruption. Who wouldn't hate that?Traditionally, publishers have moved at stall speed plus one in order to avoid steep dives and crashes. Reversion of rights? Maybe after you're dead. What's your hurry anyway? This is the milk run, not the express.

"Uh, how can you go back to trad deals when the books sold next to nothing self-pubbing? Their publishers offered new contracts for books that weren't doing well? Sounds generous, and unlikely."

In a couple of cases they were respected, if not blockbusting, authors with good track records. I think the publishers were glad to have them back. In the third case, the author sold a previously under-performing SP book to a small press. With that small publisher's push behind it, the book went on to enjoy national press coverage, strong retail placement, and won various awards. This was not in the US or UK.

"Even a midlist author like me can make good money - I'm talking six figures annually in my case - from subsidiary rights without having to lift a finger, so long as those rights are handled well. That's what my agent earns his 15% for."

A few people seem to have picked up on this point. I have yet to trouble a bestseller list anywhere, as far as I know, and certainly not in any English language market. But my agent works hard on my behalf. Personally, I would reject any trad deal that took world/film/audio rights unless the money was plain ridiculous - by that, I mean seven figures. But only because my agent has shown me the wisdom of such.

Thing is, I'm not that much of a rarity in this regard. I know a lot of authors who pay their mortgages with translation deals. If you hadn't guessed, I'm not US-based. A lot of this debate has been focused on America, but there's a big wide world out there that isn't in step with the Amazon thing. Good agents know this, and act accordingly.

How many authors do you know who sell by the truckload in the US, but can't get arrested in the UK? Or who are #1 bestsellers in the UK, but can barely get onto a shelf at B&N? Or sell modestly in English language markets, but are household names in Germany and France? I know a bunch, and I bet you do too. For me, I never thought eastern Europe would be the significant market it turned out to be, but there you go. All of the hoo-hah over self versus trad publishing completely fails to take account of that side of the business.

"I regularly kick out people who are hostile in the comments section. The only one who I allowed to be insulted is me. And the only ones I insult are anonymous pinheads. ... You are anonymous, but your comments have been smart. That respect will carry over if you choose to sign your name."

You've told me my comments are smart before. You've also called me a pinhead. I've also been called a liar here, though not by you, if I remember correctly.

There's a serious problem in this debate, and I've commented and blogged about it elsewhere. All this vitriol, so many grudges, so much bitterness. I'll be honest, here, Joe. I've called you an asshole and worse in various parts of the internet. I believe much of your blogging is about click-baiting, about courting notoriety, and even if your intentions are genuinely to help other writers, your carefully cultivated persona is becoming a hindrance to that goal. The debate is being distorted by various people and their individual agendas, you chief among them.

There's a new world dawning for authors, but we're being distracted by partisan bullshit. It's unnecessary, it's unhelpful, it's holding authors back.

We don't need graphs or statistics. We need an understanding that we're part of an industry that is diverging, and that the success of one isn't the demise of the other. People said paperbacks would kill the publishing industry, like they said home video would kill the movie business. Turned out the opposite was true.

You're fond of making predictions: allow me to make one. Things will shake out and settle down before long, and we'll be left with the NYC and London publishing worlds continuing as before, albeit adapted to the shifting landscape; at the same time, we'll have a lucrative market for cheap, quick genre reads, made up of indie and contracted writers. Readers will have all the content they want, authors will have more opportunities than ever before, and established publishers will have new revenue streams and plenty of authors to fill their catalogues.

If we could just quit all this angry, bitter sniping in the meantime, the world would be a better place.

To answer Joe's questions, the pseudonym came long before my interest in publishing. About 10 years ago, I wanted to make sure that my rants about software architecture came up when someone searched for my real name and not my rants about the Bush administration's torture policies. I live in Houston and I didn't want that to come back against my employer. My real name is unique (my wife and I hyphenated our names when we married and no one beside us and our children have that surname). So I chose an internet moniker that reflected my interests. The real Ockham came up with the notion of ternary logic which is fundamental to SQL logic. He was a person of deep religious convictions who wanted to get religious imstitutions out of politics. And he wanted understand everything in a systematic way.

By the time I showed up, quite by accident, over at PG's place, my browser cookies defaulted my WordPress id to William Ockham. I decided to keep the identity to maintain continuity.

The only time I have used my real name since I started commenting on publishing is when I wrote for DBW because they insisted. As a bonus for folks who read all the way down in Joe's comment section, my real first name is John. My (constructed) last name is Cavnar-Johnson.

"Yes, we do. We absolutely do. If you can't see why and how it empowers us as authors then... I don't know what to say. Good luck."

Okay, so if graphs and statistics are vital, why reject one set as invalid and accept another as valid? The Digital Book World stats versus Howey's stats: Which set of stats is right, which is wrong?

Let me guess: is it the one that best aligns with your own preconceived views?

Are these stats going to improve your writing? Will they help you sell more books? Will they put more food on your table?

Really, I'm so tired of this hostility. Trad authors and publishers are not your enemy, for Christ's sake. Just write some fucking stories and see if you can sell them. That's what the rest of the publishing world is doing. Apart from me. I'm here doing this, for some reason.

My take-home from reading all the threads and comments about the Author Earnings report: eBooks, online retailers and self-publishing have, for the first time, allowed the author and reader to connect more directly than ever before. In this new system, the reader is king in a way they never were previously. Readers always made books hits by their purchasing behaviour but it was always from a limited selection of books curated by agents and editors and publishers.

Those gatekeepers weren't all that great at picking the books the readers wanted and most of the ones they did pick faded away after short brief lives spine out on some retailer's bookshelves and ended up pulped. Those few blockbusters made publishers and editors and a few authors big money, but most authors were left with middlings and leavings.

Based on the data Hugh provided and the details Joe has been blogging about for years, the system was set up to benefit the curators rather than the artists who produced what the reader wanted -- good books. It's shocking to me how poorly most legacy authors do in their contracts and in sales compared with the curators. It seems wrong.

The old system of publishing was premised on expensive print publishing but given the rapid adoption of eBooks and online retail, that old system seems like it is destined to go the way of the 8-Track and Vinyl. The economies are different.

Now, with the rise of self-publishing, online booksellers and eBooks, the author and reader have taken far more control than they ever have in the past. Not just in the author's ability to reach readers, but in the reader's ability to choose directly from a wider variety of books. More choice is good, yes?

People bemoan the 'tsunami of dreck' that self-publishing threatens, but readers have become the new curators, replacing those in Manhattan. They are the new gatekeepers. All they care about is a good read, not who published the book or which business person decided it was good enough to merit their consideration.

I have never once heard a reader say -- "Oh, Penguin has a new book out that I must read!" or "Oh, The Bookish Literary Agency said this book is a must-read so I must buy it!" Readers talk to each other about titles and authors. They talk about the work. That's all they care about.

Readers now curate based on what they read on Goodreads from their friends, or what they find on book blogs from like minded readers and reviewers or Amazon's "also read" or "also viewed" or "also bought" lists.

It's entirely possible now for someone like me, without ever having an agent or traditional publishing deal, to hit several bestseller's lists, sell 70K books in a year and make a very nice living as an author. I'm not a blockbuster, but I can actually make a living. I like to think that readers are responsible for the success I do have. I like that Amazon and I share the same interest -- pleasing our customers, aka readers. That is how we make our money.

The reader, buying books, is the focus. They always decided before but now, the choices are limited only by the willingness of authors to keep publising and there being a way for readers to find their books.

I realize that most self-published authors don't have my level of success. But I like the idea that readers are choosing what they like directly rather than from a narrower selection chosen by someone on Madison Avenue.

Sorry for my longwinded comment. ☺

Thanks to Joe Konrath, Hugh Howey, The Most Excellent Data Person, and others for the wonderful information and insights. Yes, the data is partial and limited, but it is far better to have that limited data than have none at all. What it shows is the outlines of a brave new world of publishing. I can't wait for more from AuthorEarnings to fill in the blanks.

These stats help us make decisions about our writing business. Many/Most of us don't reject entirely numbers coming from other places. Nor do we believe that Howey's numbers have anywhere near all the answers. But when all you've been getting is numbers which are missing a big piece and suddenly you get data that fill in a chunk of the blanks, it is a big f%$ing deal.

Assuming you want to make a business decision with as many facts as possible. You have said in this thread you're lazy and don't want to be work harder with the effort required to self-publish. Please don't assume the rest of us choose to run our businesses that way.

You said, "Trad authors and publishers are not your enemy." Very few have EVER implied let alone stated that traditional authors generally are the enemy. Very occasionally one with a lot of influence will say something publicly which many of us believe is misleading and wrong. Joe often calls such authors out. That hardly makes us the "enemy" even of that specific author, let along "Trad Authors" generally.

Regarding publishers, it's somewhat reasonable to infer an "enemy" status from the level of criticism they receive from self-published authors. It sounds like you want the hostility to stop. I can sympathize, I really can.

But by belittling stats as a tool for running a business and belittling the importance of wanting control over your own work, you're essentially contributing just as much to it as anyone else. Standing between what you call two enemies and saying, "That which you believe is important is stupid" to either party might feel neutral, but in reality it represents creating a third front in the battle. You've joined the very fray you purportedly hoped to avoid.

The ONLY way to stop hostility is to defeat it or transcend it (some would argue defeating it never works). If that's truly your goal, I humbly suggest that your approach here is not furthering that end.

I am routinely confounded by the condescension and arrogance of traditional publishing “experts.”

How is that people who routinely go about their lives shopping for mortgages and car loans, weighing insurance plans, making life-enhancing decisions for their children, making long-term retirement plans and working everyday making important decisions for which they get paid ARE TOO F’ING STUPID TO FIGURE OUT HOW TO HIRE A GOOD EDITOR AND COVER DESIGNER?

The idea that an author should be take into account unearned advance as a BENEFIT is probably the worst piece of business advice I’ve ever heard. Sure, it’s nice to have money upfront, but that’s not the point of signing the contract. I’ve been traditionally published for almost ten years. I make 64 cents per mass market paperback sold. If I signed my contract never expecting to make more than my 10K advance, I’m an idiot. Why? Because that means if you average that income over the expected term of the contract—100 YEARS-- I’ve just made a deal worth a $100 A YEAR.

So, the bad thing to do would be to self-publish because I’m too dumb to find a good editor. The good thing to do is sign a contract that will pay for a sushi dinner for two once a year. And I don’t even get to eat 70 of those dinners ‘cause I’ll be dead.

Anon wrote:You're fond of making predictions: allow me to make one. Things will shake out and settle down before long, and we'll be left with the NYC and London publishing worlds continuing as before, albeit adapted to the shifting landscape; at the same time, we'll have a lucrative market for cheap, quick genre reads, made up of indie and contracted writers. Readers will have all the content they want, authors will have more opportunities than ever before, and established publishers will have new revenue streams and plenty of authors to fill their catalogues.

This attitude is evidence that change is just getting started in the publishing world. I have seen technological change in many different industries and the patterns are eerily similar. Here is the short version:

1. Upstarts, enabled by a new technology, challenge the powers that be. 2. Incumbents respond by criticizing the quality of the upstarts goods (often this is valid criticism). 3. Some customers buy the (inferior quality?) goods. 4. Incumbents counter-attack with a focused effort that allows most employees to continue doing what they have always done. (Bookish, Author Solutions, etc,)5. Some upstarts get better, some are co-opted, some fail, new ones come along. 6. Incumbents relax. The new normal isn't the end. (This is where many folks in publishing are today.)7. The smart upstarts realize that they can change and adapt, but the incumbents can't. The old way of doing business is what pays the bills at the incumbents. They can't give it up. 8. The upstarts control the future of the industry and the incumbents shuffle along, sustained by inertia.

As an IT consultant, I have worked with many different industries and the people in them always believe their industry is a special snowflake. Sometimes the "product" really is, but the "business" never is. Writing stories that people will buy is pure magic. Everything is just business. Works like every other business.

Looking at the two closest industries, film and music, might give the best clues to how things will pan out. Music is probably the closest because it has a similarly easy route for the DIY participants (anyone with a computer and the right software can make an album in their bedroom), and it's the furthest down the road of change.

I come from a music background, and I remember back in the 90s when the idea was first discussed of musicians bypassing the labels and selling direct to consumers via the internet. There was a lot of cheering and jeering from musicians at the demise of the hated corporate behemoths who'd excluded them from the marketplace. A new utopia of musical freedom was coming, and surely The Man couldn't hold back the tide.

It didn't quite work out that way, though. Things certainly changed, and lots of new avenues opened up for musicians. But the top end of business is still dominated by the behemoths. They've just consolidated and got a bit more behemoth-y.

What has changed, and I think this is significant for us, is that it's now much easier for smaller independent labels to compete with the majors due to the opening up of distribution via iTunes etc. The real losers, as we know, were the bricks and mortar retailers. They were the only ones in the chain who proved to be truly unnecessary.

It looks like the movie business is going the same way. The retailers are already dead or dying, but the top end is still dominated by the studios, but at the same time it's easier for smaller outfits to gain access to the marketplace.

That's where I see publishing heading. Four or five years from now, the Big 5 may well be the Big 3 or 4, but they'll still be at the top of the food chain. But access to the marketplace will continue to open up for both indie authors, and independent presses. And it's worth considering that piracy is not a problem on the same scale as it is for the music or movie businesses.

What saddens me, because of my own personal affection for them, is that bookstores are the most vulnerable in all this. I cling to the hope that their special snowflake status will see them through. I do believe smaller independent stores stand a better chance than the big chains - well, chain singular, really.

I was a little tetchy in last night's comments due to the late hour, but here's a point I'd like to get across: A constant thread of spite runs through these parts, a lot of gleeful hand-rubbing at the idea of the evil publishers toppling from their perches. What I keep wondering, though, is why is it necessary for them to fail so you can succeed? Joe is fond of saying this isn't a zero sum game. That applies vertically as well as horizontally. The Big 5 aren't stopping any self-pubbers from making money, and vice versa.

Anonymous said: "I make 64 cents per mass market paperback sold. If I signed my contract never expecting to make more than my 10K advance, I’m an idiot. Why? Because that means if you average that income over the expected term of the contract—100 YEARS-- I’ve just made a deal worth a $100 A YEAR."

That really puts things into sharp focus, now doesn't it. I can't imagine anyone ever signing a contract like that.

I think you've hit the nail on the head. Regarding the adversarial tone of this blog and many of its commenters (myself included), two things come into play. First is the anti-establishment mentality that is symptomatic of pioneers — for lack of a better term. Second is the real desire to see change in the awful contracts offered by trad publishing. Obviously, they can never match 70%, but surely they can do better than 25% of net and still keep the doors open.

Big publishers won't go away unless they lose their cash cows (here we go with the farm and livestock metaphors again). Until the giants like King, Patterson, et al stop producing for them, for whatever reason, the Big 5, 4, 3 — however many it shakes out to be — will continue to lumber on. In spite of all the education that occurs on blogs such as this one, there will always be people out there searching for the brass ring and looking to the trad pubs to hand it to them. We don't have to look any further than shows like American Idol and the Voice to see evidence of this in music.

I make 64 cents per mass market paperback sold. If I signed my contract never expecting to make more than my 10K advance, I’m an idiot. Why? Because that means if you average that income over the expected term of the contract—100 YEARS-- I’ve just made a deal worth a $100 A YEAR.

Surely ebook royalties are part of the equation too, right?

If not, then you would have to sell 15,625 mass market paperbacks to earn out the advance.

Do most paperback originals sell that many copies? I really don't know. I've been hearing for quite some time that mmpb sales are declining rapidly.

But for those of us interested in print-only deals, it would be some nice information to have. Anyone have any stats on that?

I note that whenever anyone complains about the adversarial tone, it's almost uniquely critical solely against those arguing AGAINST what the complainer stands for and often (if not always) fails to note the adversarial tone of those who the complainer sides with...

It's especially rich when one admits to calling the other an asshole and then complains about the "tone" of the asshole designee... I mean, really?

I find that infuriating, and I'd note that it often also happens when one is losing an argument, they say, well, if only they weren't so confrontational, etc...

It's like saying, yeah, black people and minorities have a point, but must they be so confrontational about it, can't they do something about TONE? (and I acknowledge that's a tiny scope creep toward Godwin, but I maintain it's a relevant metaphor)...

Anonymous at 7:22 a.m. said, "I was a little tetchy in last night's comments due to the late hour, but here's a point I'd like to get across: A constant thread of spite runs through these parts, a lot of gleeful hand-rubbing at the idea of the evil publishers toppling from their perches. What I keep wondering, though, is why is it necessary for them to fail so you can succeed? Joe is fond of saying this isn't a zero sum game. That applies vertically as well as horizontally. The Big 5 aren't stopping any self-pubbers from making money, and vice versa."

I don't "wonder" about any of this. I'm not surprised to see an undercurrent of anger running through some writers' comments. The legacy publishing industry has financially exploited, verbally abused, and disrespected many, many writers.

Frankly, people should be displeased (and yes, maybe even a bit angry) about financial exploitation (Harlequin, Random-Penguin & Author Solutions, etc.) and disrespect ("culling the prize cattle from the herd").

I wonder: Do you send in comments to tone-police the legacy publishing professionals who do things like speaking of writers as cattle to be culled? Or are all your concerns about "spite" directed at writers--many of whom have been burned and otherwise mistreated by Big Publishing?

Anon 6:14 said: Things certainly changed, and lots of new avenues opened up for musicians. But the top end of business is still dominated by the behemoths.

I look at the music industry too, and on this blog I commented that in 2012 Universal, Warner, and Sony took home 88% of recorded music sales, and so it's ridiculous to think that book publishing is so different that the Big 5 will just disappear.

On the other hand, someone else pointed out that writing a book is a much more individual effort than recording an album. Even your classic singer-songwriter can't do much without some backup musicians and all that. Furthermore, even if you are a true solo performer and it's just you and your guitar, you will need to either pay for studio time or invest in building a studio in your home. Perhaps not a lot of money or effort, but a lot compared to what a writer needs to write a book.

Sure, in both fields you eventually need other people like editors (producers / sound engineers), cover design artists, and all that, but the initial production process for a novel is much more individual and less involved than recording even the most simple music album.

I don't know if this one small difference will ripple through far enough to result in a world where the Big 5 don't control most of the book sales, but I will point out that a small difference at one end of a food chain can ripple through an ecosystem in very unpredictable ways.

Today's lit fiction writers are almost exclusively coming out of the country's MFA programs, and they have the mindset of academics, where you need to "be published" to get a teaching job or whatever. You also need to be published by a "reputable" publisher to be considered for a Booker or a Pulitzer or the National Book Award or any of the PEN awards. Although the money can be there for the well-promoted Lit Fic writers, the money isn't always the primary motivation for these writers. 99.9% of the writers in today's MFA programs will sign away all rights to a novel they spent 5 years writing in exchange for a $1500 contract from Farrar or Knopf.

The other groups that will always pursue legacy deals are:

- Celebrities like actors and musicians writing biographies and even fiction (I think James Franco's poorly received Amazon-published novel will only reinforce this). Part of this is because celebrities already have agents and are just used to having someone handle things for them. There may be a few exceptions, but they will be just that: exceptions.

- Current legacy authors who are doing well enough to be the beneficiaries of large advances and will probably be the first to see a bump in their royalty rates over the next few years. These are folks who probably understand that instead of making $1 million a year in trad. pub they could make $5 million a year as indies, but they just don't want to take the risk because they are already rich and happy enough. Not necessarily a bad choice.

- Successful indie authors who believe that while they can sell 2 million books a year on their own, if they want to get to 20 million books a year they will need to sign deals. These folks will point to Howey signing over ebook and print rights to Random House UK as some kind of proof of this belief. (I'm not saying it is or it isn't.)

- Other newbie and indie authors who will not be able to resist that perceived stamp of prestige that Random House or HarperCollins or whatever can give you. Dismiss this all you want, but the need "to be chosen" is very strong in even the most independent and self-assured of us. Many indies will be able to satisfy that need for prestige through book sales and positive fan reviews and big money, but for some that will not be enough.

Will all this add up to 90% of the market? I don't know. I don't see it being less than 50% though.

I saw your conversation and I think you were dead-on. Large formerly, enormously successful organizations do not retool and restructure in ways that match the lithe, newcomers. They can't see it. Mike said a couple times something about defending an industry--Amazon or Trad. Publishing--he missed the idea the arguments by many commenters were about the authors' gains and losses not the companies/vendors. Joe said that here as well. I don't think he disagreed with you as much as he could not envision what you were saying.

"I look at the music industry too, and on this blog I commented that in 2012 Universal, Warner, and Sony took home 88% of recorded music sales, and so it's ridiculous to think that book publishing is so different that the Big 5 will just disappear."

My prediction: Somewhere, sometime in the not-to-distant future, a major legacy GateKeeper waking up and staring into the abyss of irrelevance, have their "come to Jesus moment" of revelation to the stark and brutal reality of the way the publishing industry is evolving and then adapt in some unforeseen and unpredictable way to retain their hegemony (similar to the music industry?).

(I really have no idea what I'm talking about, but I just wanted to throw this little tid-bit of electrochemical synapse activity out there to mull over).

In a couple of cases they were respected, if not blockbusting, authors with good track records. I think the publishers were glad to have them back.

The authors, or the books?

Why would any author give backlist titles to a publisher? Were these actually reprinted? If so, you have to name names, because I've never heard of such a thing.

You're saying an author got his rights back, self-pubbed, didn't do well, and the publisher bought them back? That's unprecedented.

In the third case, the author sold a previously under-performing SP book to a small press. With that small publisher's push behind it, the book went on to enjoy national press coverage, strong retail placement, and won various awards.

I can understand that more, but my feeling about awards are well documented--I've won several, and they aren't important.

I have yet to trouble a bestseller list anywhere, as far as I know, and certainly not in any English language market.

Heh, I like your use of the word "trouble".

I have a friend who has a similar story. So-so midlist sales, crazy movie deals. I suppose he is, technically a midlist author, but his income certainly doesn't reflect that.

All of the hoo-hah over self versus trad publishing completely fails to take account of that side of the business.

Yes, and no.

Unless you are bilingual, translating a novel is expensive, difficult, and the rights get weird because many translators own the translation.

I do well with my German translations, but A-Pub outsells the ones I did on my own.

At this point in time, translations are out of the reach of the vast majority of self-pubbed authors.

Now if you are legacy pubbed, translations can be easier because the author doesn't pay for them, but I'm in lots of countries and I'm not making close to six-figures on foreign rights. I didn't when I was legacy pubbed, and I'm not now that my agent handles foreign deals.

I do have a friend who sold 6 figure foreign rights, but his agent was able to do that because he has a TV series.

I've spoken often of the global market. It's going to be huge for a lot of writers. But it's too soon for most of us.

"I look at the music industry too, and on this blog I commented that in 2012 Universal, Warner, and Sony took home 88% of recorded music sales, and so it's ridiculous to think that book publishing is so different that the Big 5 will just disappear."

In the past I had found a lot of new authors via friends' recommendation, but I had found the majority of them while browsing through libraries' and bookstores' shelves. Now, I still get friends' recommendation, but now I find a majority of books, not in libraries or bookstores as I did before, but on Amazon, where trade-published books are sharing their space with self-published ones. For the music, I find the majority of music via movies, MTV and radio. I don't go and browse through iTunes. When I'm on iTunes, I already know the song's title that I want to buy. My question is, is the music coming from labels and from indies equally presented in movies, MTV and radio? I think not, and if majority of people is in that regard (stumbling over music mostly via movies, MTV and radio) like me, than that could be a reason why labels represent such a high percentage of recorded music sales.

If I did, it was because you were acting like a pinhead. I bet if you pointed to the conversation, it would back me up.

I'll be honest, here, Joe. I've called you an asshole and worse in various parts of the internet.

I'm not bothered by this. But have the bravery to stand behind your words. I don't post anonymously. If I call someone a pinhead, the world knows it is me saying it.

I'm also not big on talking behind people's backs. When I'm criticizing someone, it is public and I invite retorts. There isn't anyone I've fisked who is unaware of it. Only Zacharius responded, and he earned my respect in doing so, even though he didn't absorb the majority of what I was saying.

The debate is being distorted by various people and their individual agendas, you chief among them.

My agenda is to inform. Not to make money off of the uneducated. Not to raise my profile.

I inform by sharing data and tearing down the status quo. That often means bringing the high and mighty down from their lofty positions of power and humiliating them. That's how revolutions are fought.

People said paperbacks would kill the publishing industry, like they said home video would kill the movie business. Turned out the opposite was true.

Who was saying these things? Those in power. The publishers feared paperbacks, and studios feared video.

Publishers also fear ebooks. I've provided countless examples, the latest of which was collusion.

Ebooks are a technology being widely adopted, replacing a legacy technology. But the important difference is that they've allowed authors to self-publish, giving them power.

The balance of power didn't shift with paperbacks or video.

If we could just quit all this angry, bitter sniping in the meantime, the world would be a better place.

I'm afraid the indignation and fisking has to continue until things change and authors are informed and treated better. It has to. We need to draw attention to the ways writers are being exploited. David Gaughran is doing a great job informing authors about scams like AuthorHouse. He's doing a public service.

So is Hugh Howey.

Barry and I do a different public service. We expose legacy industry bullshit, unconscionable terms, and the pervasive attitude that authors are farm team cattle.

You may not like my tone. I like the exploitation of authors even less.

Your tone, however, has been level-headed and insightful. If you're someone I've kicked off my blog before, you are welcome back to post under your real name. And if other commenters call you names or get testy, I'll kick them off.

Okay, so if graphs and statistics are vital, why reject one set as invalid and accept another as valid? The Digital Book World stats versus Howey's stats: Which set of stats is right, which is wrong?

Let me guess: is it the one that best aligns with your own preconceived views?

It isn't too difficult to make data say the things we want it to say.

But last I heard, the DBW survey counted authors who have never even finished a book, or pubbed with a vanity press, and included them in their earnings statistics. If they did, that's just plain wrong.

Also, I'm pretty sure that polls and surveys need to get data from a random sampling, not a survey pitched to Writer's Digest readers.

I'm tempted to buy the DBW study, give it to William Ockham or Data Guy, and let them analyse it.

There's obviously a lot of cognitive dissonance going on. Depending on the author you ask, I'm a pioneer, an outlier, a hero, a role-model, an asshole, an anomaly, a leader, sour grapes, etc. I joke to my peers that I'm a polarizing figure.

But I didn't start out hostile. I started out, as Hugh has, with a sense of wonder and excitement about the possibilities that self-publishing offered authors.

And I got attacked for doing it. Authors didn't want to hear it. The legacy industry didn't want to hear it. PW did a hit piece on me, distorting facts and making things up. Absolute Write has entire threads bashing me. I posted numbers and was flat out called a liar, and people STILL don't believe me, even when I've accompanied my data with screen shots.

Go back to 2009 and start reading my blog, and see how my attitude was honed. I didn't start out sarcastic.

And now we're at a point where people like Shatzkin dismiss writers are doing it for pin money, and I'm going to call them on their bullshit because they are causing harm.

I don't see anyone as my enemy. But I am the enemy of many. You can see that by simply Googling my name.

Based on the data Hugh provided and the details Joe has been blogging about for years, the system was set up to benefit the curators rather than the artists who produced what the reader wanted -- good books. It's shocking to me how poorly most legacy authors do in their contracts and in sales compared with the curators. It seems wrong.

Four or five years from now, the Big 5 may well be the Big 3 or 4, but they'll still be at the top of the food chain.

Why do you believe this? I've reached more ebook readers by self-pubbing than my publishers could, and I make 70% royalties. Publishers are going to have to start offering more to authors, and their margins are so slim I don't see this happening.

a constant thread of spite runs through these parts, a lot of gleeful hand-rubbing at the idea of the evil publishers toppling from their perches.

I spent ten years trying to break into legacy publishing, and then ten years being abused and exploited once I broke into legacy publishing.

But I don't want them to fail. I want them to treat authors fairly.

Is there an element of glee when some legacy pundit says something amazingly stupid? Possibly. A group that excluded and oppressed me is showing how ridiculous they are--something I suspected all along--and now I have the opportunity to prove it.

Revolutions don't happen if the revolting party is happy. And it's human nature to derive satisfaction from facing and beating a bully.

So I got into a fairly non-productive conversation with Mike and Steve Zacharius in the comments yesterday and I can't help but feel that they missed the point again.

When I ask what is the benefit of signing with a traditional publisher in light of Hugh's report, no real answer is forthcoming. Essentially we're meant to ask an agent.

Point in fact, I never even bothered to approach an agent in the first place precisely because the establishment is so bad at explaining why anyone should bother with them at this point. I'm not the only one of my writing circle who has just outright ignored the establishment and I see more of them making that decision with passing time. It's obvious that they don't understand the paradigm shift from authors being supplicants to actual customers and partners, and that alone is off putting.

Another interesting thing that Steve had to say was that they have no end of submissions still. Sure, and that situation will never change given the information exchange that is now going on? It's disheartening to hear that they see no immediate reason to adjust when they have record profits coming in. Record profits that presumably arise from digital... the same thing that is enabling authors to work for themselves. How long do they think it's a sustainable business practice to give such poor terms for such a lucrative part of their business?

What I got out of the whole thing is that they don't care to discuss their future relevance, it's simply assumed. To give Steve some credit at least he's trying to talk to us peons, I guess.

Joe serves a valuable function in these debates by making himself a lightning rod.

I don't know where the other Anonymous is coming from, but many people come here because, like Joe, they've been burned by traditional publishing. At the same time, they often do not talk/complain publicly because of existing and continuing relationships in the industry. Joe says things they wish they could say.

Publishing is more a collection of niche groups that work in the same building. Some genre imprints of the Big 6 can consist of just three people. Everyone knows everyone. It's very easy to get a reputation for being a troublemaker simply for asking too many questions or objecting to misdeeds. So we keep silent so that we don't get on the top of the list when slash-and-burn time comes at a publishing house (which happens with nauseating regularity).

Joe doesn't have worry about that so he, frankly, doesn't have to kiss ass. He gets reaction. You don't see Robert Gottlieb popping up on just anyone's blog.

I have a question for people with a bit more "insider" knowledge than I may be privy to.

What kind of special deals or perks do the Big Five get with Amazon (and other e-retailers) that the average independent doesn't have access too?

I've "felt" that there is something going on that way for a while, but have no proof, so haven't brought it up a lot. Is this just me looking for a conspiracy?

I've heard that there are some special sales perks, but also noticed things that seem off. For instance, my books are rarely shown with Big Five titles int eh also boughts, even though my sales are as good or better, and my readership base has clearly gotten a specific book too.

*By rarely I mean never...

This might not make a huge difference, but it seems to have clearly been put into play by Amazon, and I have to imagine that the Big Five insisted on it.

Does anyone have that kind of information?

Also, being allowed to purchase sales slots on Amazon.com? Shouldn't anyone with the cash in hand be allowed the same access?

Another interesting thing that Steve had to say was that they have no end of submissions still.

I actually had to stop reading Shatzkin's comment thread. Between all of the ridiculous things Mike and Steve are saying, I'd be busy for hours fisking it.

Good luck on selling those old titles in a year against the other 10,000 new titles that came out at $.99 cents and having any discoverability of your titles at all.

Steve... Steve... Steve... really? Aren't Kensington titles fighting for the same discoverability against those same 10,000 new titles at $0.99 each? Why is that just an indie issue?

John Ingram's decision to push his family and his company into doing Lightning Print (now Lightning Source) in the mid-1990s was one of the most visionary business decisions in the history of the industry.

POD was revolutionary in its time, and still is useful, because it cuts waste with both storage and return shipping.

You know what cuts even more waste? Ebooks.

Now that authors can use POD and ebooks, why sign with publishers?

Most authors are thrilled to get an advance and be with a NYC publisher.

And puppies are no doubt thrilled to be adopted from a shelter, until they realize they've been taken to a vivisection lab.

Gaughran's latest post on AuthorHouse, and how many millions of dollars they earn of the naivete and gullibility of authors, is an eye-opener.

There's a sucker born every minute, and the line between AuthorHouse and the Big 5 is getting blurrier and blurrier. They both take advantage of authors.

Some things, like piracy and drug prohibition, don't benefit from education or information campaigns, because downloading files and taking drugs are things people like to do.

Is that analogous with submitting to agents and publishers? If so, I'm spinning my wheels with this blog. Hugh's data and my efforts will fall on deaf ears.

But Hugh's data verifies the growing self-pub market, so some authors are obviously getting it. Unlike the War on Drugs or the War on Piracy, which show no benefits, the War on Unconscionable Publishing Practices is moving the needle.

For me, when it comes to thrillers, romance, science fiction and fantasy...the evidence is clear. Go indie. Do it as well as you possibly can but go fast and do not look back.

For me and others who might also write in a genre that currently is less well served by going indie (like literary or children's and I write middle grade)the decision isn't currently that simple.

Since I am going indie with thrillers, I want with all my heart to go indie in my middle grade books as well. Owning your rights. Controlling things. Making better royalties. Releasing whenever I want. All of that makes HUGE sense to me.

Problem is, as much as I don't want to sign a traditional publishing contract, I'm not in this deal for any other reason than to write stories I love and maximize my profit from those stories. Unfortunately, right now, in the world of children's fiction, not many self publish authors have shared the kind of data that would make you believe you can make real money from indie publishing children's books.

I think that's going to change. I really do. I never thought I would like e-books. I was a paper snob. Now I prefer reading e-books and not by a little. My kids read e-books, as Joe has mentioned before, kids are now learning to read via e-books. The decision is between going indie now and hope the world of middle grade readers catches up? Or go traditional in these categories now and wait for the children's e-book market to catch up later to self publish.

My point is, this is the calculus that authors are going through. I don't care about the stigma of indie or the pride of traditional. I care about writing and money. Most writers do. More information helps us, not less.

- Celebrities like actors and musicians writing biographies and even fiction (I think James Franco's poorly received Amazon-published novel will only reinforce this). Part of this is because celebrities already have agents and are just used to having someone handle things for them. There may be a few exceptions, but they will be just that: exceptions.

- Current legacy authors who are doing well enough to be the beneficiaries of large advances and will probably be the first to see a bump in their royalty rates over the next few years. These are folks who probably understand that instead of making $1 million a year in trad. pub they could make $5 million a year as indies, but they just don't want to take the risk because they are already rich and happy enough. Not necessarily a bad choice.

- Successful indie authors who believe that while they can sell 2 million books a year on their own, if they want to get to 20 million books a year they will need to sign deals. These folks will point to Howey signing over ebook and print rights to Random House UK as some kind of proof of this belief. (I'm not saying it is or it isn't.)

- Other newbie and indie authors who will not be able to resist that perceived stamp of prestige that Random House or HarperCollins or whatever can give you. Dismiss this all you want, but the need "to be chosen" is very strong in even the most independent and self-assured of us. Many indies will be able to satisfy that need for prestige through book sales and positive fan reviews and big money, but for some that will not be enough.

Will all this add up to 90% of the market? I don't know. I don't see it being less than 50% though."

We may not be able to discredit big publishing enough. But what we are doing, is to make more and more people aware of the Ponzi scheme of the industry: Big 5 make huge advances in order to garner more attention in the medias, in order to boost the fallacious hope among authors to obtain such kind of contract.

For the future, there will more and more two categories: authors who are informed, and others who are not informed, and the latter will be more likely to fall in the vanity of trad publishing.

And yes, as Daniel Kenney says (and Joe said about traduction market), there are some domains where trad pub is still strong. Yet.

Commenter said to Mike S., that commenter wouldn’t take a BIG advance from trad publisher…

Mike S said, 'ok, if you want to stick to "your principles"' [!!!]

What? Mike, Mike, Mike, you mean IF an author takes BIG advance from trad pub, the AUTHOR is being UNPRINCIPLED??>??

Just as we thought, unprincipled offering by trad pubs. you said it without meaning to say it Mike.

I’m glad I’m NOT in business with YOU.

Man, what a way of looking at life you have.

And incidentally, re "pin money" I could buy the entire pin manufacturing companies of the world with the hard-earned income from my books, trad and indie. [not that there are probably many pin companies left, lol] . We're doin' just fine out here in the Indie Islands. Nice company too.

Stick that in your pin cushion MS. lol

Thanks Joe. I think we all know your heart. More black and blue sometimes, than black. Keep on.

>>>>>>>>>>Frankly, I have no interest in any "stinking advance." Of any size. What I'm interested in is NET profit to author (me) for my book. If that's big enough, I'm willing to forego any advance at all. At the end of the day, show me the money. Not some loan. Mike Shatzkin • 26 minutes ago But what if a publisher offered you an advance that you figured was *larger *than whatever you would earn by any calculation of sales and net revenue? You wouldn't take it and be content to have some of it "unearned"? If so, I admire your principles but I'm glad I'm not your business partner. Mike>>>>>>>>>

I think there's a point Mike made, which is really important, that is being constantly overlooked.

Mike contends that Howey's revenue model is flawed because he is assuming Author revenue (for e-books) is the standard 25% royalty we see in contracts. However, a significant portion of author revenue for a traditionally published writer is in large advances that will never earn out, and therefore, the author revenue is significantly higher than the royalty terms of the contract. I've seen lots of speculation that this is even used/abused as a way of paying star authors large sums of money without triggering legacy favoured royalty clauses that would increase the royalty for all authors. Taking this in consideration, nobody but the publishers know how much more money is being paid to authors than what is assumed in Howey's math.

All that being said, this should be *very* cold comfort to author's being offered peanuts on an advance. Even if, against all odds, your book is a great success, most of the money you earned is being used to subsidize those large advances that are not even expected to earn out. Hollywood accounting at it's finest.

I read a bunch of the posts on Shatzkin's blog. I keep seeing an assertion in his posts about the inherent invalidity of a sampling of one day's data.

That's a statistically invalid criticism. One day's data would quite possibly give an inherently inaccurate reading of a given author's sales, but there is no reason to assume that it wouldn't provide a fairly typical snapshot of overall market categories (e.g. self-publishing), unless there is some reason to believe that on the given day self-published works over-performed their normal market share.

Similarly, lacking any major stimuli, one might expect various publishers' market shares to be representative of their norms on any given day, unless they have a very major release or a surplus or deficit of new titles relative to the competition.

Lacking any particular reason to expect statistical wiggle from one day to the next, you would expect overall market share numbers to remain fairly consistent day to day.

Also, there's no particular reason to assume that the average author's sales wouldn't be representative. Some would be having a weaker day, others a stronger day than normal, but the average should be fairly typical unless there is a reason the sampling day varies from the norm.

Certainly sampling multiple days and comparing results would increase accuracy by increasing the number of data points, but there's no particular reason to expect much change. If the sampling had been a week, or a month, you'd only expect a fine-tuning, not dramatic differences.

"Sadly, instead of looking at the numbers, all Shatzkin did was try to discount them all. He used broken arguments that publishing houses will edit books and create covers and promote them, which make it worth making less money and giving up all rights to the books to the publishing houses. This ignores the fact that self published authors can pay a professional copy editor and book jacket designer and make more money while keeping 100 percent of the rights to their books.

Shatzkin also pointed out the fact that self published authors can't get into book stores, of which Barnes & Noble is one of the only ones left, which is also a lie since self published authors can get into bookstores just like traditionally published authors."

Jay Allan :"Certainly sampling multiple days and comparing results would increase accuracy by increasing the number of data points, but there's no particular reason to expect much change. If the sampling had been a week, or a month, you'd only expect a fine-tuning, not dramatic differences."

Jay, as I said, dates matter. Big Publishing works with Amazon, as awkward as this may seem. Big publishing don't have the same marketing push towards Amazon on Valentine's day, or on Christmas period, than on an average day of the year. Books don't sell so much on october than on august.

Independent authors have repeatedly reported the ranking/sales ratio to be different between january and march, for example. So dates does matter.

@Joe: Regarding translation, it would be a good thing to hint at Amazon that if they want to empower authors, they should give 70% when selling abroad with translated works.

Amazon could even help authors make deals with translators, like Audible does with comedians.

A very interesting paragraph from The New Yorker's article:

"Book publishers’ dependence on Amazon, however unwilling, keeps growing. Amazon constitutes a third of one major house’s retail sales on a given week, with the growth chart pointing toward fifty per cent. By contrast, independents represent under ten per cent, and one New York editor said that only a third of the three thousand brick-and-mortar bookstores still in existence would remain financially healthy if publishers didn’t waive certain terms of payment. Jane Friedman, the former Random House and HarperCollins executive, who now runs a digital publisher called Open Road Integrated Media, told me, “If there wasn’t an Amazon today, there probably wouldn’t be a book business.”"

These stats could represent a nice addition to Hugh Howey's study: Amazon constitutes a third of one major house's retail sales on a given week."

So, when we'll get sales for paper books on Amazon on strategic periods, we will know for sure if bestsellers (depending on their contracts) would be better or not self-publishing ebooks than staying with trad publishing.

But IMO, Amazon has to improve where trad pub is still strong (and among that, with helping authors translate).

I understand what you are saying, but you provide no evidence or explanation as to why the point in time referenced in the study is one that would inherently overstate self-publishing's market share and under-represent traditional publishing's. That's the problem, not only with your counter, but with the way this entire debate has been argued.

You don't simply say that a given day "may" not be representative and then take the wild leap to assuming the POV you wish to promote was somehow underreported...not if you want any factual and statistical validity to what you present.

Certainly, it is possible the day the data was drawn represents some odd confluence of events that understates traditional publishing market share, though it is equally possible the reverse is true, and that any statistical variation underrepresents the self-publishing share.

You haven't offered any counter-factual data to support any reason to believe the actual day of the sampling is not a typical one, providing an average snapshot of the market.

If you did a survey on favorite ice cream flavor (especially with a sampling the size of Amazon's daily sales), you would expect to get similar results each day within a band of statistical variation. The fact that a single day's sales was analyzed should have very little effect on the validity of the result, especially in the absence of any identifiable extraneous factors affecting the specific day of the sample.

Even if trad pub don't act always wisely, to say the least, I think when they invest money in Amazon for promoting books and/or ebooks, they expect to sell more. Or else, they wouldn't invest year after year.

So, the main question is: is KDP Select for indies more efficient then money invested by trad pub on said dates (around christmas, for example)?

Common sense tells me trad pub has to sell more in those dates, and that's why in my opinion, we need more data than just a single day in the year. I may be wrong. I just want to know.

like someone said, elsewhere, Hugh's data uses amazon because it is the ONLY game in town of that size. Those who want to invalidate the parse because of that; one day; one outfit studied, seem not to be aware that study design is based on going where the data is 'fattest.' Like, you know, to study penguins, lol, one might not be able to study them in natural habitat in the streets of Chi, SF and NY. No. One would have to ah, go to the one place where there are thousands: the Arctic. Studying penguins for one day could potentially bring huge amount of useful data. So too. One day; one AMZ. For those in the field of stat and analyses, it's a known that you can study your head off from every angle a study can be designed and still see a significant view, but not a whole view. To think otherwise, to a scientist, would be considered madness. lol

Well, I do think you both do this as more than just a "public service". You started a revolution with all the information you gave us, and Hugh (along with many others) are just joining in with more evidence that supports your assertions.

And at the risk of sounding like an idiot, LONG LIVE THE REVOLUTION!

Oh, I think we should just ignore the death-rattle that keeps spewing out of the mouths of those invested in the publishing industry.

Hi Joe, Loved this post. I've linked it on my own blog, where we frequently debate this issue. Feel free to check it out if you'd like… cheers,Krishttp://www.murderlab.com/2015/03/self-pub-or-traditional-revisiting.html